Insurance Awareness Day: How to make an informed buying decision
Life insurance policies of the pure protection variety, known as term Insurance, are basic and most necessary form of life insurance cover.
The ongoing COVID-19 Pandemic has underscored the need for Insurance more than ever before. The uncertainty that has come with the current situation has prompted consumers to look for long-term financial tools like life and health insurance solutions that offer them the much-needed security to protect their financial future, along with that of their loved ones.
We, in India, have a long way to go – both in life insurance awareness and in purchase of adequate cover. Life insurance policies of the pure protection variety, known as term Insurance, are a basic and most necessary form of life insurance cover. While consumers understand the importance of Term Insurance policies, they are often not guided well on the adequacy of cover to be financially protected. A simple way to approach this is the Human Life Value calculations method, which helps one arrive at the necessary Sum Assured amount systematically and transparently. It is also important for one to consider liabilities in the present and the foreseeable future to arrive at the right amount of life cover.
As a next step after planning with term insurance solutions, consumers could plan for other life goals like health cover, children’s education, guaranteed incomes, wealth creation, and retirement planning. There is a variety of plans today that offer long term guaranteed incomes, lumpsums, annuities, attractive market linked returns, health riders, along with the assurance of long-term life cover. There is flexibility in the form of premium payment tenures such as single pay, limited period pay, and regular pay options.
We have also seen the emergence of packaged solutions that combine attractive market linked returns and comprehensive Protection that cover Critical illness, hospitalisation, accidental death, and disabilities along with substantial life cover.
While it’s never too late to plan investments in life insurance, one should remember that the earlier one starts, the better it is. So, start early, keep investing regularly, and do not dip into your corpus unless there is absolutely no other option available.
The situation surrounding COVID-19 has presented an unprecedented challenge to all of us. The Indian Life Insurance industry is in this together and committed to doing its best to ensure that our consumers, distribution partners, and employees stay protected at all times.