Why Indian customer want cheaper insurance ?

"Many Indians tend to buy cheap insurance or no insurance at all.  Not buying or buying cheap Insurance policy, people do not seem to care much. We by definition are very fatalistic people. We do not believe we would ever die or the product we purchase need cover, so we don’t need insurance i.e the mentality of every Indian almost."

Self contradictory statement. If Indians are fatalistic, how can they believe they will never die?

In India Insurance is sold like a commodity (tax saving instrument) rather than a service that has tangible benefits. The agents make no effort to educate the customer. Therefore the customer see's limited value in an insurance offering.

To quote Kotler, Value can be seen primarily as a combination of quality, service and price (QSP), callled the customer value triad. Value increases with quality and service and decreases with price.

When agents provide better value, (quality of service) customers will not bargain on price.

Insurance companies need to train their agents to shift from a selling mode to a marketing mode. They need to market insurance offerings customized to customer needs.

I think that some customers from all backgrounds/cultures want cheaper insurance. Many people, not all but many people want more for less and you'll find that with all kinds of customers. Then you'll have the customers who are willing to accept the prices for what they are because they know and understand the value or benefits of that product or service.

Then you have others that don't and also, you'll also have the customer who knows and understands the value or benefits and they still want a cheaper price. It all depends on the type of customers that you speak with. Many people not all but many people are willing to accept or settle for a service or product at the set price.

Mr. Vishabh veer singh, I think it has got to do something with the mindset of us Indians. We want cheaper products. If you notice from the goods coming from China are mostly cheap. It is not that China produces only cheap products. They produce costly goods also. But if the importer imports the costly goods he is out of the competition. It is also right that insurance is the last thing in the mind of us Indians. So they want cheaper products. It is also true that with better presentation you can sell the higher priced products. So your approach needs to be corrected.

 

basically, in india insurance is the last option among all the saving options as there is no sufficient knowledge about the concept of insurance and also that no person can foresee the financial difficulties faced after his death. As insurance is taken much like a saving and with compulsion rather than as protection and as it gives the least interest among all the saving modes, people feel it unworthy to go for insurance. and hence they want insurance at a cheaper price. they want to hit a bigger bird with a very small stone. if they get the bird, it is beneficial and if they donot hit the bird they donot want to loose even the small stone.

The Indian Consumer equates his life to buying a bag full of vegetables therefore he wants Insurance which is at Rs.5 a day.  Income levels in our country are on an average very low, take for eg the slow down , in this scenario people have lost jobs, pay cuts , no salary hikes , so preservation of your existing assets becomes top priority , till a radical change does not come about the Indian consumer will look for cheaper deals .

 

I my observation Mathew Cherian has pointed at the rigth reason. I agree with him.

I totally disagree with you Vishab.  In my experience of selling Life Insurance ( thru my agents) where I have been on joint calls, I faced such a situation where customers ask for cheaper policies.  There have been very few cases where the customer had asked or pressed for term insurance.  I have always been able to convince people to buy good (high) premium policies, thereby fetching good commissions for my Agents.

I think it all depends on the presentation of the plan.  I am confident that we can convert a customer into buying a good or high premium policy.

When  a Customer  has no knowledge, in any market, the easiest parameter to negotiate - is PRICE.Negotiating only on PRICE shows lack of knowledge of Qualitative Parameters.That's why in Projects there are two bids - Technical and Price.

The customer who negotiates only on Price buys a Tomato when he needs an Orange!!!

Many Indians tend to buy cheap insurance or no insurance at all.  Not buying or buying cheap Insurance policy, people do not seem to care much. We by definition are very fatalistic people. We do not believe we would ever die or the product we purchase need cover, so we don’t need insurance i.e the mentality of every Indian almost. We need to build proper awareness & then things will fall in place. While it's a common mistake committed by Indians or businesses which tend to fall in this category. The worst part is that considering the high cost of their assests, many buy a cheaper insurance to just get them through and then ends up in deep soup.

We cannot change that mentality easily, so it would be better to prototype and test out what suits the Indian customer........