Why People Aren’t Buying Insurance

By Rati Shetty - Founder & CPO, BankBazaar.com | March 9, 2018

People have their own excuses for not buying insurance. Here are some of them. Does it cover one of yours? Then, it might be time to get that insurance plan. #insurance #lifeinsurance #healthinsurance #underinsured

Why People Aren’t Buying Insurance

Experts have always been saying that many people in India are underinsured. Recently news reports stated that the Insurance Regulatory and Development Authority of India (IRDAI) also believes that this might be true. The insurance regulator has said that in case of Life Insurance, there is a protection gap of close to Rs. 500 lakh crores. This is the gap between the cover that one requires and cover that has been taken. The same is the case with Health Insurance. So why aren’t people going in for insurance? There are many reasons why people might not buy an insurance policy. More often than not, these are excuses rather than genuine causes. Let’s bust some of these common excuses:

“It’s not really necessary.”

People, especially those who are young, think that they don’t need insurance.

Reality check: Critical illnesses can strike at any time. It is a must to have a Life Insurance and Health Insurance policy, especially if you are the sole breadwinner of the family. Why? Consider this. A recent study on pollution and health revealed that 2.5 million people in India are killed by pollution-related lifestyle diseases. These diseases include pulmonary diseases (related to the lungs), cancer and diabetes. And who are the people who are affected? The low and middle-income groups. This is precisely why insurance is a necessity.

“Insurance is expensive.”

Put it down to general lack of awareness or commission-hungry sales agents, but insurance is sometimes pitched like an exotic product that is expensive.

Additional Reading: How To Avoid These Five Common Health Insurance Distress

Reality check: Insurance is actually very simple. Life Insurance covers the risk of death while Health Insurance covers the risk of one falling ill. You can get either of them for less than Rs. 20 per day, which is much less than the cost of a soft drink! You can easily get a Rs.1 crore Term Life cover for Rs. 20 per day if you are a 30-year-old non-smoker and for Rs. 40 per day if you are a smoker. What about Health Insurance? Rs. 5 lakh cover starts at Rs. 12 per day if you are a 30-year old.

You can even choose the monthly payment option in case you don’t want to pay annual premiums. But note that choosing monthly payment can be a bit more expensive than paying the premium in one shot. Annual premium for a Rs. 1 crore term plan starts at Rs. 7,000, while a Rs. 5 lakh health cover will cost you Rs. 4,000 (all figures are from Bankbazaarinsurance.com).

“Insurance provided by my employer is adequate.”

Most salaried people think that the insurance cover provided by their employer is more than enough. This might not be true.

Reality check: Experts advise that you should have a Life Insurance cover that is at least 10 times your annual salary. So, if you are earning Rs. 5 lakhs per year, you should have Life Insurance cover is at least Rs. 50 lakhs. Most companies provide insurance cover for only Rs. 2-5 lakhs. Even Health Insurance cover is only for a lakh or two. Consider that an open heart surgery can cost you more than Rs. 3 lakhs. If you rely on your employer’s health cover, you might have to shell out quite a bit in case of such emergencies. This is why you need Health Insurance cover for you and your family.

Additional Reading: 7 Helpful Tips To Choose The Best Health Insurance Plan

Another point is that unlike a decade ago where you got just insurance when you bought insurance, today insurers are offering value-added services along with your policy. For example, some insurers give you a discount card along with your health plan. This card can be used to avail discounts on tests at diagnostics centres, clinics, and hospitals. These discounts could be up to 30%. There are also insurers that offer discounts on out-patient services which your policy might not cover. Some even offer discounts for medicines at pharmacies.

So, don’t postpone your plans to buy an insurance policy. Start comparing across insurers and get a policy that is right for you and your family. You’ll save a ton that way and will also have complete peace of mind.

This article was originally published on LinkedIn.

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Category: 'Note' worthy ExpertSpeak Insurance

About Rati Shetty - Founder & CPO, BankBazaar.com

Sugar and spice and everything nice, Rati certainly imbibed some rich qualities from Toblerone in Brazil and Milka in the US while managing the launch and go-to market operations of many of Kraft Food's brands in export markets across the world while working for Kraft in the US and Taiwan. She continues to spread the goodness, raising the bar high for awesome customer experience on BankBazaar.com with astounding outside-the-box ideas for creating beautiful new products, features and applications and ensuring that the end results are perfect, dummy proof and can only lead to one thing: pure customer delight.

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