A Finnovate survey uncovers significant gaps in emergency funds and health coverage among Indian households, highlighting ongoing vulnerabilities despite increased awareness and government schemes.
A recent survey by Finnovate Financial Services suggests that many Indian households remain exposed to financial shocks despite holding savings, insurance or an investment plan. Nearly half of respondents said they did not have enough emergency money to meet three months of expenses, while 60% reported family health cover below ₹25 lakh, pointing to gaps that can become costly when income is interrupted or a medical crisis strikes.
Emergency savings emerged as a clear weak spot. The survey found that 46% of respondents had less than three months of expenses set aside, or none at all. That leaves households vulnerable to job loss, illness or other sudden costs that cannot easily be delayed. Financial advisers generally treat emergency funds as money for short-term needs that should be readily accessible, with the right size depending on income stability, debt and family responsibilities.
Health insurance showed similar shortcomings. Finnovate said 60% of respondents had less than ₹25 lakh of cover for the entire family, and many relied on employer-sponsored policies. The survey found that 43% had both company and personal health insurance, while 14% depended only on an employer plan and another 14% had no health insurance at all. That matters because workplace cover often ends when a person changes jobs or retires. The survey also noted that medical inflation in India is running at 11% to 14%, well above general inflation of 6% to 7%, which can erode the value of cover over time.
Saving patterns also suggested that many households may be accumulating too slowly to build resilience. Among respondents who answered the question, 16% saved less than 10% of monthly income and 36% saved between 10% and 30%. Another 33% said they saved more than 30%, but only 9% saved more than 40%. Finnovate said that, taken together, the figures show how rising living costs, loan repayments and long-term goals can limit the usefulness of modest savings rates.
Debt was another pressure point. The survey found that 57% of respondents had some form of equated monthly instalment, or EMI, commitment. Of those, 21% said EMIs took up 20% to 40% of income, while 9% said the share was higher than 40%. Heavy repayment burdens can leave less room for saving, investing or handling unforeseen expenses, making it important to view debt alongside the rest of a household’s balance sheet rather than in isolation.
Planning, too, appeared incomplete. While 64% said they had some kind of financial plan, only 49% reviewed it regularly. Almost one in four respondents lacked clearly defined financial goals, and among those who did have goals, 20% said their assets were not aligned with them. Tax planning also showed weak understanding: 29% of respondents mainly wanted to reduce taxes, while 25% relied on a chartered accountant and admitted they did not understand taxation well.
The survey’s findings echo other recent research. A separate PolicyBazaar survey, reported by Livemint, found that 83% of respondents understood health insurance and its importance, but only 19% actually owned a policy, highlighting a gap between awareness and action. Meanwhile, a health survey released by the statistics ministry and reported by The Economic Times indicated that coverage has risen sharply in recent years, helped by government schemes and stronger uptake in rural areas. Even so, the Finnovate data suggest that for many families, insurance, savings and planning still do not add up to full financial protection.
Succession planning was the area most likely to be overlooked. Finnovate said 85% of respondents had named nominees or beneficiaries, but 15% had not done so or had not updated the details to match their current family structure. The shortfall was larger on wills: only 16% said they had made one, and some who had not said they were too young to think about it. That points to a broader problem the survey captures well: financial security is not just about income or investment returns, but about whether a household is prepared for shocks, debt, medical costs and the orderly transfer of assets.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
