India faces an “underinsurance” crisis: most Indians do not have life or health cover adequate to absorb the financial shock of illness, death, or emergencies. Growing numbers are living protected only partially or not at all. Surveys reveal up to 80-90% protection gaps in mortality cover among younger and middle-aged adults.

Key factors include :

• Affordability constraints – premiums don’t scale with income, and many find recommended cover (often 10x their annual income) unaffordable.
• Low awareness and risk literacy – people underestimate insurance needs; often do not reassess after life-events (marriage, children, salary changes).
• Inadequate product design or scope – existing policies often lack sufficient sum insured, Have caveats, or weak health benefits.

Why this matters: underinsurance forces households to drain savings or assets during crises. It increases vulnerability, especially for low-income households. Addressing this protection gap isn’t just social good it also represents substantial market opportunity in insurance/fintech sectors.

What should be done :

• Simplify and customise insurance plans so low-income & informal sector workers can afford adequate protection.

• Public awareness campaigns around how much cover is needed and when to review policies.

• Regulatory nudges: incentivising insurers to offer more transparent policies and making life/health cover more accessible.