State sponsored pension plans in India are currently not strong enough for individuals to consider them, according to a report by YES Securities on life insurance in India.
Hence, demand for private life insurers’ pension products is on the rise. The report said, “We believe, the trends are here to stay for a longer period.”
Annuities and pension plans are a direct play on the increasing life expectancy in India.
With medical advances, life expectancy in India has improved from 41 years in 1960 to 69 years in 2019. The World Bank expects this to improve further to 75 years by 2050. With this, old age dependency is expected to increase as well.
This would translate into a surge in the number of retirees who will need to sustain their post-retirement savings over longer life expectancy, says the report.