An age-old question I still find relevant: Are you adequately covered by insurance? Did you just say a yes? Wow! Are you sure? Now, that is a million-dollar question: How can you be SURE that you are adequately covered?
The insurance sector in India has been showing dismal figures with penetration levels falling over the years. The industry recorded a penetration level of 3.3% in Financial Year 2014-2015 which declined from the earlier level of 3.9%. According to the Swiss Re Sigma Study, India ranks 15th in premium collection among other nations. Despite having such a large population, why do the figures present such a dismal image and why is the ranking so low?
One of the primary reasons for the decline in penetration levels is the lack of awareness among the common masses. Most people avoid buying insurance and even if they do, the chosen covers are almost always insufficient. Is having a Rs. 1 lakh or Rs. 2 lakh worth of policy enough? Is your insurance cover sufficient or too little?*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
Further in this article, we have elaborately discussed everything you need to know about COVID_19 and life insurance.
When we talk about the common population, almost all of us are underinsured. The reasons are several. Let’s have a look:
Lack of trust can be overcome by good propaganda and customer education on the part of the insurance industry while affordability factor can be overcome through gradual increment in coverage with increasing income. However, lack of awareness is something that needs to be tackled through proper information and only then will people realize the value of insurance and the optimum cover.
When talking about the optimum level of cover, industry experts have devised various methods such as:
In the words of TR Ramachandran, CEO and MD of Aviva India, “Insurance addresses four key needs in a customer’s economic life cycle, which include savings, protection, investment and retirement.” It is correctly remarked because the importance of insurance cannot be gainsaid be it health insurance or life insurance. At the same time having a sufficient cover is also imperative because the advantages of insurance cannot be felt with a minimal cover. So use any of the above mentioned methods but be sure to have a sufficient level of cover.