Akshay Dhand – Increased Demand for Term Insurance

Vivek Law: Hello and welcome to this very special series - Finance Made Simple. Joining me today is Akshay Dhand who's the appointed actuary at Canara HSBC Life Insurance. Thanks very much, Akshay, its a pleasure talking to you.

Akshay: Thank you, Vivek.

Vivek: Akshay, one of the developments that happened owing to COVID is that people started gravitating towards protection. Protection in terms of buying term insurance, protection in terms of capital guaranteed plans because there was a complete shift towards protection in the last year that we saw. Do you see this trend continuing going forward as well? The good news is that people have woken up and this pandemic has made them realize the importance of having protection in their life. Do you see this trend continuing as we go forward or do you think it will die down and people will get back to being complacent about their insurance?

Akshay: No, I think that one of the positive things which have happened as a result of the pandemic is that people have suddenly realized that there is life's uncertainties can be altogether different kind of levels. So, the need for insurance is something, which has come up in everybody's mind. I had friends and family members who know I am an Appointed Actuary talking to me about insurance for the first time during the pandemic. So, the awareness has increased as you said. The awareness has increased because of protection products. It has increased on guaranteed products. It has increased on insurance life insurance in general. I think that's a very good thing because no matter how much awareness we try to bring in an event like this can shake you up beyond anything. So, I think that's a great thing and I do certainly see this trend continuing. I certainly see the importance of insurance growing as we go on in particular about protection products and guaranteed products for sure. However, having said that the other products which are there in the market like unit-linked products or annuity products do have an important role to play and I think their importance will also remain. And in fact, I guess once the things normalize a bit, what I think what you'll find is people will continue buying those products in addition to that, the need for guaranteed products as well as protection products would have increased as a result of this pandemic awareness. So, I think for sure overall the industry should benefit from that and I certainly see people buying more insurance going forward. Both in terms of protection and guaranteed and the regular stuff should also continue in my opinion. Because they serve different purposes. And just taking a little more time after what has typically happened in India. Now the concept of protection is lagging and that's true for a lot of Asian markets as well as abroad in the western world - protection is the first thing you buy when you buy life insurance as opposed to savings. In India, savings is the first thing you buy when you buy life insurance. So, protection has come up at the forefront as a result of this pandemic. So, while I feel that the other savings elements because the sense of saving in India is so strong and the sense of the need to save for future events is so strong that will continue. Plus this protection element will certainly take a very positive thought in people's minds going forward. So, yes, I think it's a great thing happening for the insurance industry.

Vivek Law: Thank you very much Akshay for coming by and sharing your perspective with the viewers. As always, its a pleasure talking to you. Thank you very much.

Akshay Dhand: Thank you so much.