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HDFC Life’s Life Freedom Index (LFI) Sees An 8.7 point Increase Over 3 Years
LFI gives insights on urban India’s financial awareness and planning trends across segments.
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HDFC Life has announced the findings of its Life Freedom Index. HDFC Life said it believes in a research-driven approach to seeking insights to understand the ever-changing customer needs, innovate through new offerings, and enhance the overall customer experience.
HDFC Life established the Life Freedom Index (LFI) in 2011. LFI enables the measurement of “financial freedom” of customers. The latest findings for the FY’20 study conducted by Nielsen have been released in the form of a report that highlights the positive movement by 8.7 points in the index to 66.6, in comparison to the previous exercise done in 2016, which is still a low number considering the segment. The study was conducted in 14 cities representing the whole of India and involved over 2000 participants between the ages of 20 and 60 years.
The report details the findings in terms of behavioural changes in customer segments across different indices, in various locations.
LFI is an Index that helps measure “financial freedom” of customers, across four key segments: Proud Parents, Wisdom Investors, Young Aspirants and Smart Women.
The Life Freedom Index includes four sub-indices: Financial Awareness Index, Financial Planning Index, Financial Sufficiency and Adequacy Index, and Financial Liberty Index.
In the report, HDFC Life has highlighted an 8.7 point increase in the Life Freedom Index in comparison to 2016. This indicates that people are becoming more confident with the adequacy of their financial plans and its comprehensiveness to fulfil their needs and aspirations. The increase in LFI scores is primarily contributed by Proud Parents and Young Aspirants. Both these segments have seen an increase across indices.
Interestingly, LFI scores in Metros (69.0) are significantly higher than in Tier 1 (64.6) and Tier 2 (61.4) cities. The lower scores in non-Metro cities are due to significantly low financial awareness scores in these markets.
Also, LFI scores are significantly higher amongst Nuclear families (empty nest stage), largely driven by their high financial liberty and sufficiency on account of their fewer responsibilities.
Speaking about the LFI report, Pankaj Gupta Sr. EVP (Sales & Distribution) and Chief Marketing Officer – HDFC Life, said, “We created Life Freedom Index with the objective of measuring financial awareness and planning across our target segments and markets. The Index gives us a deeper understanding of the levels of financial planning, as well as the sufficiency and adequacy of these financial plans to enable a person live their life with the Pride of being self-reliant.
We do this study every three years and for this round we partnered with Nielsen. As a life insurer we use these insights to design our product and service offerings to continue to meet customer needs and expectations on an ongoing basis.”