Life insurance, which we take lightly, which we should not, why do we say that? Isn’t life precious? Do we consider it precious? Not really!
Look at the figures, which narrate an alarming scenario concerning life insurance in India. At least 988 million Indians – more than the population of Europe and 75% of all Indians, are not covered by any form of life insurance. Even if one is insured, it is only 8% of what may be required to protect a family from financial shock following the death of an earning member, reveals Government data.
In the financial year 2021, India’s life insurance penetration stood at around three percent, while the non-life insurance penetration was much lower at one percent. The overall penetration for the industry was over four percent in 2021.
How big is the insurance market in India? India’s Insurance market stands at $131 Bn as of FY22. The Indian insurance industry grew at a CAGR of 17% over the last two decades and is expected to continue its commendable growth trajectory in the future years.
What is life insurance? Life Insurance provides a definite amount of money in case the life insured dies during the term of the policy or becomes disabled on account of an accident.
Why life Insurance is needed? To ensure that your immediate family has significant financial support in the event of your demise.
Who needs life insurance? Every individual who has a financially dependent family. Life insurance is for securing you and your family financially. Everyone wants that their children are well-taken care of in their absence. Life insurance makes sure your loved ones don’t suffer financially when you are not around.
Why should you have life insurance? To fulfilling-term financial goals, for protecting children’s future, service loans and liabilities, children’s education planning, helping dependent spouse, leaving a tax-free legacy, and retirement planning.
While considering life insurance, you must evaluate the merits of Term Insurance, which is the simplest and purest form of life insurance. It provides financial protection to your family at the most affordable rates. With term insurance, you can get a large amount of life cover (i.e. sum assured) at a relatively low premium rate. The benefit amount is paid out to the nominee in case of the death of the person insured during the term of the policy. Life insurance plans are not only- Zindagi ke baad bhi! These are Zindagi ke saath bhi!!
All of us want to have a good life and going forward want to give a good life to our children, for which we need to accomplish some goals.
To accomplish these goals, money needs to be saved. Life insurance plans help you achieve your goals by helping you build a financial corpus with the protection of a life cover. Life insurance plans inculcate a habit of disciplined saving. Paying a little amount as an insurance premium each month will help you accumulate funds. What’s even better is that this small monthly amount only keeps growing. So, years from now, you’ll have enough wealth accumulated to accomplish your more substantial and long-term financial goals. These are Insurance – cum- Investment plans.
Besides, you can claim an income tax deduction on your life insurance premiums under Section 80Cof the Income Tax Act, 1961. Payouts for death claims are tax-free under Section 10(10D) of the Income Tax Act, 1961.
What are the important aspects of buying an insurance policy?
Sum Assured, the first and foremost thing to look at is the amount you will be covered through your insurance. You are required to choose the sum assured before the commencement of the policy. You need to assess all the future needs and expenses of your family members before deciding on an amount.
Duration of the Policy, the time for which your policy will be active. These can range from 10 years to even covering for you till the age of 100.The longer the policy the lower can be your premium.
Flexibility, this can be in the form of providing multiple payment options, freedom to choose the mode and duration of payments, etc. The more flexible a policy is the more it is easy for you to customize according to your own.
Terms and Conditions, make sure you do read the terms and conditions part associated with the policy thoroughly.
Claim Settlement, Last but not least is to consider the claim settlement process of the insurer. Go through the process so that you know the steps involved to get the claim. Also, check the claim settlement ratio of the company.
All these aspects will make your choice of life insurance policy easier. The need of the hour is to increase the life insurance penetration manifold considering the untimely deaths being witnessed during Covid 19.
I back my statement with the research report released this year by CARE Ratings which projects the industry to continue to grow at around 14%-15% per annum. The momentum is expected to be maintained in the life insurance industry due to factors such as growing awareness, increasing urbanization, product innovation, multi-channel distribution, tax benefits, etc. Look at life, & beyond with a promise!
You can connect with your Insurance Broker immediately to cover your life, to make the slogan true – Zindagi ke saath bhi, Zindagi ke baad bhi by LIC of India.
