A recent report reveals that nearly 49% of life insurance policies issued by India’s top 10 insurers are discontinued within five years, resulting in significant financial losses for policyholders, according to The Financial Express.
The findings come from a survey by personal finance advisory firm 1 Finance, which highlights widespread mis-selling practices in India’s insurance and financial products market. Customers are often sold policies without receiving full or accurate information, leading to costly and unsuitable insurance plans.
As a result, many policyholders discontinue their coverage early, forfeiting valuable benefits and suffering financial setbacks. The report emphasizes the urgent need for greater transparency and consumer education within the insurance industry to protect buyers from mis-selling.
The study further notes that the average persistency ratio at the 61st month—reflecting the percentage of policyholders continuing to pay premiums—is only 51% among the top insurers. “Nearly half of policyholders stop paying premiums within five years, often walking away with significant financial losses,” the report warns.
This situation calls for stronger regulatory oversight and trustworthy insurance practices to ensure consumers make informed decisions and maintain adequate coverage.
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