One in four rural Indians fear their savings won’t last a year - What this means for Financial Security.
- Nagaraja Sirigeri
- Jan 22
- 2 min read
Updated: Jan 22
A recent survey highlights a growing concern about financial resilience in rural India.
According to the India Protection Quotient (IPQ) 7.0 report by Axis Max Life Insurance and research firm KANTAR, one in four rural Indians believe their savings may not last even 12 months if faced with unexpected financial needs.
Key Findings from the Report
1. Deep Savings Vulnerability in Rural India
The survey of more than 1,600 respondents across 155 villages found that 25 percent of rural households believe their savings would run out in less than a year.
While nearly 40 percent are optimistic that their savings might last five years or more, this optimism does not always reflect financial stability.
2. Insurance Awareness is Increasing - But Ownership is still low
The report shows some positive shifts in financial awareness.
Rural India’s Protection Quotient - A composite measure of understanding, ownership, and confidence around life insurance has improved from 12 to 16 compared with a previous edition. Awareness about insurance products, especially term plans, has risen as well.
However, actual ownership of policies remains low, with cost cited as a key barrier.
Around 40 percent of rural respondents said they simply do not have the money to purchase insurance - a larger proportion than in urban areas (31 percent).
Misconceptions about insurance, past poor service experiences, and the belief that insurance benefits the family rather than the individual also contribute to low uptake.
Regional and Gender Gaps persist
The Protection Quotient and insurance ownership vary significantly across regions.
Rural areas in the South and West show better awareness and adoption, while Eastern rural regions lag behind.
The report also found a gender gap: women scored lower on awareness, ownership, and confidence when compared to men, highlighting the need for targeted financial literacy efforts.
Digital Usage is Rising — A pathway for Inclusion
An encouraging trend is the increasing use of digital tools among rural Indians.
Around 88 percent now use mobile phones, and digital adoption for financial transactions - including UPI payments and online banking has jumped significantly.
Almost half of respondents now use digital platforms to resolve service issues. This digital growth could help bridge gaps in financial inclusion if financial services are tailored to rural needs.
What this means for Financial Planning
The findings highlight a real and immediate need for financial resilience in rural India.
Savings that may not last a year point to vulnerability in the face of medical emergencies, crop failures, job loss, or other unexpected expenses.
Awareness is rising, but without actionable financial tools - including insurance, emergency funds, and accessible products - many rural households remain exposed.
This is not just an insurance story; it is a financial security story.
Strengthening financial confidence outside urban centres requires:
Greater affordability and accessibility of basic financial products
Improved awareness and education tailored to rural realities
Digital-enabled solutions that meet people where they are
Targeted support for women and underserved regions
Final Thought:
Financial resilience is not just about income; it is about preparedness.
For too many rural households, savings may not be sufficient when it matters most.