In India, the insurance market was opened to private companies in 2000, a little more than two decades ago. Since then, there has been a significant increase in insurance knowledge among purchasers. The insurance business has developed significantly, from new insurance products to the manner insurance is purchased. On the occasion of Insurance Awareness Day, Peuli Das, Chief and Appointed Actuary, IndiaFirst Life, talks with FE Online some essential elements that one should examine in order to be more aware of life insurance as a financial product.
Regarding the aim of life insurance
Why do you need life insurance? Because your loved ones will always require your reassuring hug, even if you are not present. They’ll need a chance to reconstruct their lives without having to worry about looming expenses, a breathing space that doesn’t push them to make important decisions when they’re feeling the most insecure and vulnerable. Some may refer to it as an investment, but at its foundation, it is about caring for people you love the most.
On the amount of life insurance that should be kept
Deciding on the quantity of life insurance to purchase necessitates thorough evaluation of all the value that one may offer to one’s family and dependents in the near future. It must go beyond the urgent expenditures such as rent, groceries, clothing, and even a car. Tuition costs for your child are only going to rise. Your elderly parents will almost certainly require protection against deteriorating health, rising medical costs, and domestic assistance. A mortgage would have to be paid off. A minimum of 10 times one’s annual salary is typically advised. Insurers provide Human Life Value Calculators that provide realistic estimations while taking all of these considerations into account.
On the many forms of life insurance plans that may be considered
The Indian customer has a plethora of alternatives in the insurance industry today. There are, of course, pure protection policies, which are inexpensive and provide assured long-term coverage. There are savings-cum-insurance plans that provide consumers an investment solution that provides assured consistent returns for the family in addition to the death benefit. There are also market-linked plans for less risk-averse consumers seeking wealth growth as well as death coverage.
When is the best time to get life insurance?
It is important to purchase life insurance as soon as possible. The younger one is at the time of enrolment, the cheaper the cost for the same coverage. Furthermore, it would allow your savings to grow over time and better assist you when you need it. Because women have a longer life expectancy, premium rates are more appealing to them. Premium tax breaks make life insurance an appealing financial planning tool. Other tax advantages exist, depending on the policy. Now is the time to call your agent or read the information booklet before deciding on the coverage you require.
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