Mumbai: HDFC Life, one of India’s leading life insurance providers, has released the latest edition of its Life Freedom Index (LFI), showing a significant rebound in consumers’ financial confidence post-COVID-19. The index, which measures financial freedom across various consumer segments, has risen by 9 points to 70.8 since its previous edition in 2021. This growth highlights improved financial outlooks across demographics, driven primarily by advances in financial planning and adequacy, though financial awareness continues to lag.
The LFI, established in 2011, evaluates financial preparedness among Indian consumers in three key life stages: Young Aspirants, Proud Parents, and Wisdom Investors. It uses four sub-indices—Financial Awareness & Familiarity, Financial Planning, Financial Sufficiency & Adequacy, and Financial Liberty—to provide insights into consumer sentiment. The 2024 study, conducted by NielsenIQ, surveyed 2,076 respondents from 15 cities across Tier 1, 2, and 3 markets, offering a comprehensive snapshot of financial trends.
The latest results show that while consumers are increasingly prioritizing children’s financial security, personal fitness, and lifestyle improvements, retirement planning is gaining importance, especially among older age groups. Many now consider health expenses, daily living costs, and support for children when planning for their retirement. Among the consumer segments, Wisdom Investors showed the most growth in financial confidence, followed by Young Aspirants and Proud Parents.
Notable improvements were observed in Tier 3 markets and among working women. The rise in Tier 3 scores is attributed to better financial access through digital advancements and connectivity, while working women have benefited from increased access to financial education and empowerment initiatives. Regionally, the West Zone recorded the highest index score, while the East Zone displayed the fastest growth.
The study also highlighted the growing significance of life insurance in financial planning. The Life Insurance Confidence Index, which tracks the role of life insurance in achieving financial goals, rose by 9.3 points. Consumers increasingly view life insurance as essential for financial security, generating returns, and planning for their children’s future.
Vishal Subharwal, Group Head of Strategy and Chief Marketing Officer at HDFC Life, commented on the findings, emphasizing the steady progress in consumer confidence. He noted that the study highlights meaningful advancements among working women and Tier 3 consumers, underscoring the impact of digital inclusion and financial awareness. He reaffirmed HDFC Life’s commitment to further promoting financial preparedness and achieving the goal of ‘Insurance for All by 2047.’ The findings underscore the growing role of financial planning and life insurancein fostering a secure and confident financial future for Indian consumers.
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