"Spending a whole day looking for insurance is fun," said nobody, EVER!
"Spending a whole day looking for insurance is fun," said nobody, EVER!
  • Indians Are Under-insured And Don’t Know It

    Life Insurance
    • Premiums as low as Rs.17/day for sum assured of Rs.1 crore*
    • Claim up to Rs. 1,50,000 deduction under section 80C**
    • Choose between annual and monthly premium payment options

    A life insurance policy acts as financial security for one’s family in the event of the life assured’s death. With the cost of living increasing rapidly over the years, it is a must to purchase a life insurance policy in order to ensure that your dependents have the necessary financial means to carry on with their lives, without having to go through additional hassles.

    However, the fact remains that life insurance penetration in India is far behind the global average. A vast majority of Indians simply don’t have a life insurance cover and many individuals who have purchased life insurance in India are under-insured.

    Reasons Why People Don’t Purchase Life Insurance or Don’t Opt for a Sufficient Sum Assured

    There are many myths surrounding life insurance. Here, we will look at some of the most common reasons why people in India don’t purchase life insurance and why they opt for a low sum assured, even if they do end up purchasing a policy for themselves.

    1. Lack of Awareness: Many people don’t purchase life insurance policies simply because they are not aware of the benefits of having a life insurance policy and, in fact, view it as a drain on their income. Also, a lot of individuals don’t purchase life insurance until they really need it at a later age. Purchasing a life insurance policy when you are older will be more expensive and the life insurance cover provided to you might also be lesser, especially if you have health conditions.
    2. Cost of the Insurance Policy: Many people wrongly believe that life insurance policies are extremely expensive. In truth, if you purchase a life insurance cover in your 20s or early 30s, you are likely to be offered the policy at a lower premium rate. Also, if premium payments are a concern, you can choose to purchase a term insurance policy, which will offer you high coverage at a relatively low premium rate. There are also several other ways through which you can reduce your premium payable such as choosing your riders carefully, availing discounts offered by the insurer, etc.
    3. Relying on the Company-Provided Life Insurance Cover: Many salaried individuals who are provided life insurance policies by their employers don’t purchase an individual life insurance policy for themselves. While employer-provided life insurance policies may be beneficial, it is important to remember that the protection provided by these policies usually cease when you leave the service of your employer. Further, most group life insurance policies also offer a relatively low cover to enrolled members.
    4. Other Financial Priorities: Many people direct their money into savings and investment products as their income grows, instead of increasing their life insurance cover or purchasing a second life insurance policy with higher coverage. This leads to the concerned individual being grossly underinsured, even though his/her income has grown significantly. It is necessary to always have a sufficient life insurance cover to ensure that your dependents are able to carry on with their lifestyles.
    5. Complexity of Insurance Policies: Many first-time life insurance buyers are usually intimidated by the various types of life insurance products that are offered, the jargons that are used in the policy brochures, and the terms and conditions of the policies. Thus, if you find the task of purchasing a life insurance policy to be extremely daunting, you should seek the assistance of a financial/insurance advisor. Many insurance companies also have their own insurance representatives/advisors, whom you can call for assistance.

    Benefits of Purchasing Life Insurance

    Some of the key benefits of purchasing life insurance policies are as follows:

    • Financial Security: With a life insurance policy, you can be certain that your dependents will be financially protected if something untimely happens to you. The payout provided by the insurance company can pay for your child’s education, serve as an income replacement, and help your family pay for immediate expenses.
    • Coverage against Loans: If you have loans and debts, you should certainly purchase a life insurance policy. In case of an untimely eventuality, your nominee can use the death benefit payout to pay off your debts.
    • Helps You Plan for Future Milestones: If you purchase a policy that offers returns such as an endowment plan or a money-back plan, you can time the returns to coincide with important milestones in your life.
    • Helps You Plan for Your Retirement: Life insurance companies offer annuity/retirement plans that will provide you with a steady source of income during your retirement years. Thus, purchasing such a policy can help you secure your retirement years.
    • Tax Benefits: One of the key benefits of life insurance policies is that they also offer tax benefits. As a policyholder who pays premiums, you can claim tax benefits under Section 80C on a yearly basis. Similarly, the returns that are paid are also eligible for tax benefits under Section 10(10D) of the Income Tax Act, 1961.

    It is necessary to purchase a life insurance policy, regardless of what your age is. Purchasing a policy when you are young will ensure that you are able to secure substantial coverage at a competitive premium rate. Thus, make sure to consider your needs, research various life insurance policies, and purchase a policy that is best suited to you.

    *The customer reviews/feedback/opinions expressed on this website are solely of their authors and do not reflect, in any way, the view of BankBazaar Insurance.

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