People are aware of insurance services but are unwilling to take the coverage, a recent study reveals.
Around 53% people of the country were aware of insurance but only 12.61% had access to insurance services during the year 2014.
The poor and individuals living in rural areas have lower access to insurance service than those in urban areas, according to the data of study.
Institute of Microfinance (InM) recently brought up the analysis after conducted the survey on access and awareness of insurance.
The 2014 study shows that access to insurance did not increase significantly.
One of the reasons the study finds is that many households were not able to pay for insurance premium.
The lack of institutions across the country was also another reason behind the lower rate of access to insurance services.
According to the findings, 50% people living in rural areas have awareness about insurance services, but only 12% of them took the coverage.
In urban areas, 63.53% people were aware of insurance while 14.54% of them had access to insurance services.
In the poverty status, only 10% households are covered by insurance and 45.5% were aware of it in comparison with non-poor households with 13.5% access to insurance and 63.5% awareness.
There are 77 insurance companies currently operating in Bangladesh. It has been found that awareness about insurance has increased in comparison with 2010, but their services continue to be relatively limited, according to the analysis.
The study suggests that Insurance Regulatory Authority will have to formulate policies for systematic development of the insurance sector.
Lack of confidence in insurance services makes people reluctant to take insurance coverage, said Das Deba Prashad, former managing director of Delta Life Insurance Company.
He said delay in claim settlement is regular phenomenon in the insurance sector which is also one of the main causes for not willing to take insurance policy.
Insurance companies have to come closer to general public introducing new products and policies, he suggested.
According to the analysis, around 10% households have access to life insurance while over 3% to other type of insurance services, but the portion of households having no access to insurance is significantly higher to 87%.
The lack of access to insurance services could be attributed to low level of awareness.
However, awareness has increased over the past few years, according to the study report.