Covid altered the way the average Indian thought about life insurance by focusing on pure protection term policies. Despite the fact that financial advisers advocate term insurance, the majority of consumers still shun it.
According to Max Life Insurance’s India Protection Quotient survey, term insurance ownership among urban Indians increased by 4 percentage points in 2021. Even with the increase, less than a third of the respondents (32%) had term insurance.
The reasons for not purchasing term insurance are strange and unsustainable. Because he lacks funds, Abhijeet Chatterjee is unable to purchase term insurance. Before disconnecting, the Kolkata-based bank executive snaps, “I may not have appropriate life insurance, but getting a policy costs money.”
Term insurance is quite affordable.
Surat-based Nilesh Makhija is equally uninterested in revealing his life insurance policy’s enormous shortfall. “I’ll give you a call when I’m ready to purchase life insurance.” He says brusquely, “Right now, I’m busy.” Arjun Sethi, a software expert in Bangalore, has big ambitions for his pre-schooler son’s international education and an early retirement for himself, but his life insurance is only four months’ worth of income.
Is it necessary for you to have life insurance?
Financial advisers advise that after paying off all outstanding obligations, one should purchase a life insurance policy that can properly replace one’s salary. This is especially true for individuals who are the family’s primary income.
On the other hand, if you have accumulated sufficient assets and have no liabilities, you may not require life insurance. People, on the other hand, can make mistakes when performing this computation.
Purchase right away.
Someone once remarked that insurance should be purchased as soon as possible. Many people, however, are unaware of this advice because they assume they have ample time to plan and purchase life insurance. Meet Arjun Sethi, a 34-year-old IT professional with a yearly salary of Rs 42 lakh. Sethi wants his kid to pursue higher education abroad, which might cost him around Rs 2 crore.
Returns are unlikely.
Because term plans have no maturity value, many consumers avoid purchasing them. If the policyholder lives to the end of the term, he receives nothing. “Term plans only pay out if I pass away.” If I survive the term, I won’t get anything,” says Mayank Agarwal, a Delhi-based small businessman.
Agarwal is unaware that insurance should be viewed as a cost rather than an investment. After all, when you insure your automobile against damage or theft, you don’t anticipate a return on your investment.
Term policies are available from all insurers. There are single premium plans, restricted premium payment plans, and rising cover plans in addition to the usual plans. Choose the plan and version that best fits your budget.
Follow and connect with us on Facebook, LinkedIn & Twitter
