According to industry experts, Term Insurance is the best form of financial protection, but a survey in Indian cities has revealed that most Indians are either not aware of it, or refuse to buy the correct amount which will give them the protection they desire. The India Protect Quotient is a way of measuring how protected Indians feel on a scale of 1 to 100, and the score currently stands at 35. It takes into account the awareness and the possession of life insurance, the degree of preparing oneself in the case of demise and the preference towards term plans. Considering how inflation is making it difficult to lead a proper lifestyle even with a regular salary in current times, one would do well to think about the future and secure the family.
A variety of factors lead people not to opt for term insurance. One of the highest quoted reasons is that most of the people think that they will not die suddenly, or they refuse to think about death. People are also not comfortable in thinking that there are no returns on that money, no one wants to pay a high premium for nothing it seems. However, it is important to understand that the money will go towards the protection of the family and not the person getting life insurance.
One of the ways to check whether one has taken sufficient life insurance or not is to calculate the expenses that the family currently incurs and then multiply it by ten times. This is the amount that one can expect the family expenses to be in a decade or so, considering factors like inflation. The money derived from the term insurance should be enough to cover the- then the lifestyle of the family and the wife and children should be able to live as comfortably, the children’s education and wedding paid for and the medical expenses covered through the life insurance money.
Some assume that the term insurance is a waste of money because there are no returns if nothing happens. Also, those who try to lead a healthy lifestyle also assume that there are fewer chances of contracting any illness that can be life-threatening. However, the problems would arise in case of an accident that can be life-threatening, so one should at least have an accident policy in place. Since the premium of the term insurance is considered low if brought at a younger age, a person of 25 years old can get a 1 crore cover for a tenure of 40 years, by paying Rs 675 per month only. Such an amount is often more than enough to take care of a lot of family expenses in case of the sudden demise of the breadwinner of the family. If a 55-year-old plan to get life insurance, he will be given a tenure of 10 years, for which he would have to end up paying Rs 3063 per month.
What people fail to understand that if the adequate cover is not taken for life insurance, it will do nothing to protect the interest of the family in case such a situation does arrive, and the amount paid towards the premium would be wasted either way. Some simply tend to get life insurance for tax benefit purposes. Hence, make sure to consult with your family and your accountant and decide on a figure which will be enough to cover your family’s requirements.