Do you have a life insurance policy? NO??? Why not?!?
As most of you may know, life insurance policies are financial instruments that give you a chance to save and at the same time ensure that the financial future of your family is secure. How the most basic form of insurance, Term Life Insurance, works is that you pay a company a certain amount of money and they tell you that should anything happen to you, they will pay your family a large amount of money. However, this is not the only form of life insurance. Life insurance products range from term insurance plans to endowment plans to even unit linked plans that help invest your money in various markets. A lot of plans offer policyholders regular return and even help with the education of their kids and retirement planning.
With life insurance policies providing its customers so many goodies, it is very surprising to note that not many people in India even bother with buying life insurance. The question then becomes why? These are some of the most common reasons why people might not buy life insurance.
- Don’t know what insurance is all about
Many people, through lack of exposure or even lack of interest, don’t know what life insurance is or how it works. This, in turn, leads them to a state of ignorance about the actual benefits of life insurance which propagates their lack of interest in buying it.
- Too expensive
There may have been instances when a person was inspired to buy life insurance but decided not to because the plan they checked out was too expensive. Well, it’s true that insurance premiums can be very high at times but that’s not the case with every policy. For instance, if you were to consider term life insurance, your premiums would be quite affordable and the sum of money you would be covered by would still be considerable.
- Not a tangible investment
When you invest in a Fixed Deposit, you know the amount you have invested and you can watch it grow but this is not the case with life insurance and this tends to discourage some people. The only advice we can offer is to not let this prevent you from getting an insurance policy.
- Cultural factors
When people decide to opt for a life insurance policy, there are chances that others will tell them that there are better investments out there; that it would be better to purchase a piece of land or to buy gold. While both are sound investments, it must be remembered that not everyone can afford to buy a house or enough gold to cover family expenses if they were not around.
- Don’t get anything in return
This is been a bone of contention for a lot of people who feel that term insurance policies are not worth it since they don’t offer maturity benefits. The fact of the matter is that while traditional term insurance policies don’t always offer maturity benefits, a vast majority of other insurance products do.
- Don’t need insurance
Some people argue that since they have no one depending on them, they don’t need to buy life insurance. If the reason you are saying this is that you are still young and don’t have a family of your own (wife and kids), then you should still buy a policy for the time when you do have a family dependent on you.
- It’s all too confusing
Yes, life insurance can get confusing at times, especially when you are comparing plans from different insurers. But if you were to take a few minutes to really understand what’s on offer, you’d save yourself a lot of trouble in the future.
- Not a guaranteed payment system
Some people may argue that the pay-outs of death or maturity benefits are subject to conditions which means that the insurer may not pay. This concern can be addressed by simply talking to your insurer and asking them about the conditions that would nullify insurance policies. Another thing you can do is to go with companies that have the highest claim settlement ratios because life insurance, in spite of all these doubts, can be a safer bet than things like investments in Mutual Funds,since it’s not always linked to the stock or money markets.
If any of these factors are responsible for you not having a life insurance policy, then you should immediately rethink your decision making regime and try your level best to ensure that you are covered by one. Even if it’s not for you, let it be for your family and their future.