Growth in Personal Income
As per report of National Council of Applied Economic Research (NCAER) 2009-10:
There are 28.4 million families with incomes between Rs 2 lakh and Rs 10 lakh per annum. (This is as per the World Bank definition of middle class.)
The number of such households was 4.5 million in 1995-96 and 10.7 million in 2001-02.
These households are expected to grow 4 times in next 10 years.
The report said that two thirds of the Indian middle class is to be found in urban India.
Report on the savings pattern states that:
83% save for emergencies,
81% for Children’s education,
69% for old age,
63% to meet future expenses towards marriages, birth and social ceremonies.
The above pattern indicates tremendous scope for life Insurance products.
As per report of Confederation of Indian Industry (CII) and Ernst and Young in September 2010:
The projected per capita GDP of India is expected to increase from ₹18,280 in FY 2001 to ₹1,00,680 in FY 2026, which is indicative of rising disposable incomes.
A recent study by McKinsey also predicts that India’s economy will grow fivefold in the next 20 years.
The demand for insurance products is expected to increase in light of the increase in purchasing power.