Being in the business of financial advisory, I find many intelligent and educated people who are without adequate insurance cover.Sometimes one wonders why people don’t buy term insurance in India despite it being such a cheap product. Here are some of the reasons:
DO NOT FEEL THE NEED TO BUY TERM INSURANCE
As term insurance is not mandatory, many people don’t see the value in it. Just because a car insurance is mandatory or a home loan company mandates that you buy term insurance, people do not see a lot of value in buying insurance.They consider it a waste as they are not going to get anything in return. As insurance is not a tangible product ( unlike a car or house) and whose benefits are usually available in the future,many people ignore it. Also unlike western world, where insurance is considered extremely important, in Indian context this is a fairly new concept and we are not used to it.
DO NOT UNDERSTAND FINANCIAL RISKS
Most of us are bad at estimating probabilities, hence we many people prefer to be in denial, thinking- this won’t happen to me. Call it “bhagwan bharose”. Hence we prefer to be self insured rather than getting insured for our risks by an insurance company. Many others are not educated about their risks and their families pay heavily in times of a sudden death in the family.
LACK OF MONEY
Since insurance costs money, many people in the past couldn’t afford the same. With the advent of cheap online term plans, it has become easier and cheaper to buy insurance cover.
LACK OF TRUST IN INSURANCE COMPANIES
Since life insurance was sold as an investment product to many uninformed people in India, many people are just wary of anything to do with life insurance. As a result, they refuse to indulge in any conversation related to life insurance. They are sometimes pleasantly surprised that they can get such higher term insurance coverage by paying such small amounts.
CONFUSED ABOUT INSURANCE PRODUCTS
Insurance companies sell so many variations of life insurance products that a customer usually feels lost and confused. As a result, he is not able to decide as to which product is suitable. Term insurance is the simplest of all insurance product, which unfortunately is never pushed by your neighborhood agent.
If you also fall in any of the above categories, I’d suggest that you educate yourself by finding more about term insurance and get a premium for your age by getting a quote at Trucompare. Make sure you buy the best product that meets your needs.
Never leave things to chance.