Why are we allergic to Insurance?
Why are we allergic to Insurance?
The insurance industry is still growing in India. As per the analysis of industry data and government data, 988 million Indians do not have any kind of life insurance to protect their family in the time of need or during an unfortunate event. That means, almost 75% of our country’s population is uninsured or underinsured. People in India avoid buying life insurance despite being aware of its importance and necessity. Many people consider insurance as an expense and hence avoid buying it at the right age. So, the question that arises more often is why do we procrastinate with the idea of buying insurance? Let’s take a look at some of the major reasons.
- Denial to imagine unthinkable happenings
None of us would like to imagine the unfortunate happenings or losing our loved ones. Buying a term insurance does not mean we need to anticipate the worst but to safeguard the family at least financially if not emotionally from an untoward event. We need to be aware of the uncertainties of life and be prepared for it as soon as we start earning to protect our family. Nowadays, people at a young age in their 20s and 30s are succumbing to lifestyle illnesses like diabetes, cardiac problems, etc. But, why do we wait for life-changing events to realize the importance of insurance and to make a smart financial decision? Our ignorance towards the financial risks is one of the major reasons that make us allergic to insurance.
- Young age and good health
When we are young and in good health, the thought of buying insurance never crosses our minds. But we fail to understand that age and good health are not permanent. As age increases, health deteriorates. When it comes to buying insurance, with the increasing age and deteriorating health insurance gets expensive. You can buy higher coverage with comprehensive and extensive features at a lower price when you buy them at a young age. It is our misconception of ‘nothing will happen to me’ that makes us fail to take notable consideration of term insurance requirements in our life at an early age.
- Relying on employer-sponsored insurance
Most of the companies cover their employees under group insurance plans. We rely on those insurance plans sponsored by employers without understanding whether the coverage limits are sufficient for the family or not. Even if it is adequate, this coverage is only available during our working years. Once we retire, we will find it difficult to get health insurance due to our own health condition. Failing to understand the requirement of adequate insurance coverage is mainly because of a lack of knowledge and lack of proper financial planning.
- Overwhelmed by the insurance plan choices
With multiple insurance companies operating in India offering a wide variety of insurance plans, it gets challenging and complicated for us to choose the right and most suitable one. It could also lead us to think that it would be easier to get one whenever needed. It is important to first assess our insurance needs and then buy accordingly.
- Misconception on insurance cost
Most of us avoid buying insurance thinking that the coverage is highly expensive, which is a clear misconception. But it is important to note that term insurance plans that provide life coverage and pure protection are cheaper in comparison to developed countries. Though we incur an expense today, our family will be financially secured during any unfortunate event. Failing to understand that insurance is an essential cost for all of us is one of the major reasons to be allergic to insurance.
Insurance is an important aspect of any financial plan. It is important to be adequately insured before we start our financial planning journey to reach financial independence. When we start understanding the necessity of insurance to protect our family, their goals, and needs, and when we start understanding the insurance products better, we can make a smart financial decision.
Not realizing the importance of insurance is what makes us allergic to the product that purely is designed for our protection. It is crucial for us to understand the role insurance plays in the financial journey by shielding our dependents against the financial risks that may arise due to unforeseen life events. We also need to understand that buying insurance at a young age when we are healthy can be extremely cost-effective and more beneficial in terms of features. Let’s stay adequately insured and make smart financial moves!
Disclaimer
This blog is meant for educating people about the importance of the right financial planning. The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. Consult your financial advisor to get personalized recommendations based on your life circumstances.
About Rajiv Nair
Rajiv Nair co-founded Finshield Investment Advisors after successfully managing several large clients and businesses in the financial services industry for over 15 years. Rajiv is a Certified Financial Planner who believes – ‘Any amount of effort in wealth management is worthless if at least a part of it is not usable within your lifetime’. He is known to be steadfast in his Investment philosophy and an avid reader on diverse subjects. Learn more about him here Rajiv Nair | LinkedIn
The insurance industry is still growing in India. As per the analysis of industry data and government data, 988 million Indians do not have any kind of life insurance to protect their family in the time of need or during an unfortunate event. That means, almost 75% of our country’s population is uninsured or underinsured. People in India avoid buying life insurance despite being aware of its importance and necessity. Many people consider insurance as an expense and hence avoid buying it at the right age. So, the question that arises more often is why do we procrastinate with the idea of buying insurance? Let’s take a look at some of the major reasons.
- Denial to imagine unthinkable happenings
None of us would like to imagine the unfortunate happenings or losing our loved ones. Buying a term insurance does not mean we need to anticipate the worst but to safeguard the family at least financially if not emotionally from an untoward event. We need to be aware of the uncertainties of life and be prepared for it as soon as we start earning to protect our family. Nowadays, people at a young age in their 20s and 30s are succumbing to lifestyle illnesses like diabetes, cardiac problems, etc. But, why do we wait for life-changing events to realize the importance of insurance and to make a smart financial decision? Our ignorance towards the financial risks is one of the major reasons that make us allergic to insurance.
- Young age and good health
When we are young and in good health, the thought of buying insurance never crosses our minds. But we fail to understand that age and good health are not permanent. As age increases, health deteriorates. When it comes to buying insurance, with the increasing age and deteriorating health insurance gets expensive. You can buy higher coverage with comprehensive and extensive features at a lower price when you buy them at a young age. It is our misconception of ‘nothing will happen to me’ that makes us fail to take notable consideration of term insurance requirements in our life at an early age.
- Relying on employer-sponsored insurance
Most of the companies cover their employees under group insurance plans. We rely on those insurance plans sponsored by employers without understanding whether the coverage limits are sufficient for the family or not. Even if it is adequate, this coverage is only available during our working years. Once we retire, we will find it difficult to get health insurance due to our own health condition. Failing to understand the requirement of adequate insurance coverage is mainly because of a lack of knowledge and lack of proper financial planning.
- Overwhelmed by the insurance plan choices
With multiple insurance companies operating in India offering a wide variety of insurance plans, it gets challenging and complicated for us to choose the right and most suitable one. It could also lead us to think that it would be easier to get one whenever needed. It is important to first assess our insurance needs and then buy accordingly.
- Misconception on insurance cost
Most of us avoid buying insurance thinking that the coverage is highly expensive, which is a clear misconception. But it is important to note that term insurance plans that provide life coverage and pure protection are cheaper in comparison to developed countries. Though we incur an expense today, our family will be financially secured during any unfortunate event. Failing to understand that insurance is an essential cost for all of us is one of the major reasons to be allergic to insurance.
Insurance is an important aspect of any financial plan. It is important to be adequately insured before we start our financial planning journey to reach financial independence. When we start understanding the necessity of insurance to protect our family, their goals, and needs, and when we start understanding the insurance products better, we can make a smart financial decision.
Not realizing the importance of insurance is what makes us allergic to the product that purely is designed for our protection. It is crucial for us to understand the role insurance plays in the financial journey by shielding our dependents against the financial risks that may arise due to unforeseen life events. We also need to understand that buying insurance at a young age when we are healthy can be extremely cost-effective and more beneficial in terms of features. Let’s stay adequately insured and make smart financial moves!
Disclaimer
This blog is meant for educating people about the importance of the right financial planning. The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. Consult your financial advisor to get personalized recommendations based on your life circumstances.
