Life insurance is no longer about preparing for the worst; it is about building financial stability

Most people think of life insurance as something you buy for your family, a safety net that steps in when you are not around. And yes, it does that job incredibly well. 

But there is a much bigger story unfolding. 

What often gets missed is how life insurance can support you while you are very much here, helping you plan, grow, and achieve the milestones that matter. And overlooking this side of it is where many Indian families miss out on its full potential. Here is a number that should change the conversation. 

According to IRDAI’s annual report, death benefits made up only 7-7.5% of total industry payouts in FY25. The remaining 92 paise of every rupee went to people who are alive, healthy, and using their insurance money to fund real moments: a child's college admission or a retirement that does not depend on anyone else—a decade of disciplined savings finally paying off. The private life insurance industry tells the same story. 

That is real money reaching people at real moments in their lives. And yet, most people still do not think of life insurance this way. 

For years, conversations about life insurance were built around what happens after. That framing had its place. But it left customers with a narrow view of a product that has quietly grown into something far more powerful and far more personal. 

More honestly, if you look at how the industry has worked, 98% of business is intermediated. The focus has often been on: what product works for the bank channel, and what works for the agent? That is a distribution-led model, and it has shaped not just how we sell but also how people perceive what we sell. 

Pure term insurance accounts for less than 5% of our portfolio, as per data available in Aditya Birla Sun Life Insurance’s (ABSLI) investor presentation Q4FY25. The overwhelming majority of what people choose is savings-linked, investment-linked or income-generating. They are not buying to prepare for the worst. They are buying to build toward the best version of their financial life. 

Furthermore, there is also a strong opportunity for us to do more to address the myths that hold people back. In our own focus groups, nine out of 10 people from higher income segments did not know that many term products return your entire premium if you survive the policy period. Nine out of ten. That is not a customer failure. That is a gap, and it belongs to us. 

When I was 30, I bought a ₹50 lakh cover because that was what I could afford at the time. At 40, I realised I needed ₹5 crore, and the premium had become 8-12 times more expensive. By 50, the cover I actually need is priced beyond what most people would consider. Nobody told me this when I was 30. Nobody showed me the compounding cost of waiting. That is the conversation we owe every young Indian today. What no one has clearly told them is that they are not being asked to plan for death. They are being offered a tool to build their life. 

As per the Swiss Re report, India's insurance penetration stands at around 3.7% of GDP, with life insurance at 2.7%—well below global benchmarks. Closing that gap is not just a distribution challenge; it is a relevance challenge. People need to see themselves in what the industry offers, not as future statistics in a claims register, but as individuals with goals, timelines, and real financial ambitions. 

The industry's job now is to tell that story honestly. Not just to offer a product, but to add real value to people’s lives. That means simpler products. Platforms where people can discover and compare without being pushed. Conversations built around what customers need, not what channels prefer to sell. 

Out of every ₹100 that the life insurance industry paid in FY25, ₹92 went to someone alive, healthy, and better off for having planned ahead. That number is not a marketing line. It is proof that this product works—when people are given the chance to understand it. India cannot reach its financial inclusion ambitions with the industry continuing to talk past its customers. We know what the product does. It is time we learned how to say it. 

(The writer serves as the Managing Director and Chief Executive Officer of Aditya Birla Sun Life Insurance. The opinions expressed are solely his own.