When you are making several financial decisions, one instrument type you may be bound to come across is insurance. Most people prefer having life insurance to ensure that the financial health of their family is safe in their absence. There are several types of life insurance out there and you can choose one based on your individual needs. While there are people who are purchasing life insurance, there are also some who do not want to buy one.
Here are the top six probable reasons many Indians prefer not buying life insurance –
Lack of knowledge
Most people who do not want to buy life insurance may not know what exactly life insurance is and how it can help them. They may also be unaware that there are different life insurance products that can meet their individual needs. The several options available may confuse some people instead of giving them clarity. There are plans like Unit Linked Insurance Policy (ULIP), where one can avail dual benefits. However, people might be unaware of such plans or may find it too complex to understand. Hence, they might avoid buying life insurance altogether.
Ignorance of the financial risks
Most people who do not buy life insurance are over-confident that nothing will happen to them. They are unaware of the repercussions their families might face in their absence . People who buy life insurance usually create a financial plan before buying one. They use tools like the life insurance calculator, get an understanding of their premiums, and ensure that the sum assured is sufficient for their loved ones after their demise. However, people who are unaware of the financial risks may simply find it as an unnecessary expense.
Being laid-back and procrastinating
There is no rule or lawful compulsion regarding having life insurance in India. Hence, several people neglect buying life insurance or simply procrastinate. They think they will buy it later, as there is no sense of urgency for buying a life policy. However, the reality reflects otherwise. Most families have a single breadwinner on whom all the financial responsibilities are dependent. It is a grave concern if the breadwinner has no life insurance, as in the case of a sudden demise, it might disrupt the finances of the family.
A life cover provided by the employer
One of the most common reasons people do not buy a life insurance policy is that their employer already covered them. Many companies provide life insurance to all their employees for a certain sum assured. However, the sum assured by the employer may not be enough for most employees. They need additional coverage to ensure that their family is fully covered. Also, in most cases, company-provided insurance might only cover the employee and not their family members.
Being fit and healthy
People who are healthy and fit might see purchasing life insurance as a waste of money. They are not worried about their lifespan as they are in good health. However, on the contrary, the more healthy or young a person is, the lower the premium they have to pay to avail life insurance. Age is one of the key factors when the premiums are being calculated on a life insurance calculator. The more a person grows old, the more their insurance premium increases. Also, in today’s times, one will find insurance premiums with investment elements to them. This ensures that people do not feel that their entire premiums are an unnecessary expense.
Most Indians struggle to make their ends meet. When one has a list of expenses lined up and not enough funds, it is easy for things like life insurance to go on the back burner. When burdened with responsibilities, immediate bills and finances are prioritized over long-term expenses. Also, there is a misconception about a life insurance policy in general, which is that most people assume that it is quite expensive. Whereas, in reality, one can choose life insurance that fits their budget easily, so they are not burdened by the premiums and their lives are secured too. There are term plans that one can avail of that cost as low as Rs.8 per day.
Basically, what life insurance is, is a backup for your loved ones in case something happens to you. While it might seem unnecessary at the moment, it secures your family from the unknown. Also, remember that traditional insurances are not the only option. Research the different types of life insurance and choose the ones that fit your needs perfectly.