On June 28, National Insurance Awareness Day will take place, serving as a reminder of the importance of insurance. Insurance products helps you protect your loved ones financially against the unfortunate events and aid in the recovery of losses caused by unanticipated events. Insurance protects your house, automobile, and livelihood by providing a safety net in the event of unforeseen circumstances. And National Insurance Awareness Day urges us to review our insurance selections to ensure that our families and homes are adequately covered.
What Is Life Insurance?
Life insurance pays your nominees a lump sum payment if you die within the policy term, allowing them to continue on the path to financial independence. Thus, it is more important than ever to comprehend why life insurance is so essential and assess how well your family is covered. What better day to do it on, than the National Insurance Awareness Day. When it comes to figuring out 'how financially safe your family is,' you must first assess your 'Protection Quotient.'
Why Are We Lagging In Insurance Coverage?
● Insufficient Perception
The conventional view of insurance is that it is primarily used for tax planning rather than risk mitigation. Furthermore, the unpredictability of income makes insurance costs look unneeded and burdensome. Despite the fact that various schemes exist to meet the needs of the economically weak, they are often ignorant of them.
● Incoherence
For most people, the terms, and conditions as well as benefit structures remain difficult to grasp. As a result, customers seldom know which products will meet their needs.
● Lack Of Knowledge
The lack of insurance knowledge is the primary cause for Indians' indifference about purchasing insurance. The purchase of automobile insurance is mandatory as per law. Other insurance, such as term insurance, remains a push-sale item, mostly based on the recommendations of third-party brokers. Rather than addressing the customer's requirements, few agents frequently promote things that benefit them.
1What is Your Protection Quotient?
On a scale of 0 to 100, the 'Protection Quotient' indicates the degree to which you feel safe. It assesses your readiness, knowledge, preference, and ownership of life insurance policy. After determining your protection quotient, the next step is to determine the appropriate amount of life insurance required to help you accomplish your life objectives and provide risk protection for your loved ones. Purchasing an appropriate life insurance policy is a first step in this regard.
When trying to get a life insurance policy, however, it is critical that you have all of the necessary information. This will not only make the decision-making process easier, but it will also assist you in opting the suitable plan.
Importance of Insurance Awareness
One of the ways to close the gap between insurance needs and insurance purchases is to raise awareness. The significance of marking insurance awareness day can be understood from below points .
1. The insurance awareness day provides a platform for insurers to educate the public who might have questions such as ‘What is life insurance’ or ‘Do I really need it’?. Guidance on the proper coverage might assist customers in purchasing enough insurance.
2. You may take advantage of the National Insurance Awareness Day as a platform to learn more about the many insurance options available to meet your specific financial needs. You may look up at the many insurance products available, as well as their various features, pricing, and add-ons, on the web. It may assist you in efficiently planning your budget.
3. Insurance awareness refers to the understanding, that insurance is more than just a way to save money on taxes. Life insurance serves a variety of purposes, including
- A wealth-creation strategy.
- In the event of a breadwinner's early death, one of the option for the family to sustain financial difficulties .
- An efficient safeguard against financial losses caused life insured’s death.
- After you retire, you may need a reliable source of income.
4. Technology promotes insurance transparency. Purchasing through an insurer's website may help to avoid mis-selling and automate the purchasing process. Claim settlement is also made easier with online assistance. As a result, knowledge of the technology resources accessible in the contemporary insurance industry is critical. This National Insurance Awareness Day, you may raise your own awareness while also helping to spread the word. If you come into touch with somebody who needs help with online purchase process , you could help them. You may also assist them in recognizing the need for insurance and estimating the quantity of coverage that is appropriate for them.
National Insurance Awareness Day is a good opportunity to think about your insurance requirements and how to get the suitable coverage.
Types of Insurance You can Get
● Endowment Plan
An endowment plan is a life insurance policy that offers life cover to the insured and also helps the policyholder build a savings corpus so that he gets a lump sum amount on maturity if he survives the policy term. An endowment policy offers life cover along with the benefits of a savings plan.
● Term Plan
A life insurance policy known as "term insurance" provides coverage for a predetermined period. A death benefit is given to the insured person's nominees if the life assured passes away while the policy is still in effect.
● Whole Life Insurance
As the name implies, these plans provide coverage for an individual's whole life, rather than just a certain period of time.
● Unit Linked Insurance Plans, or ULIPs
A ULIP is a type of insurance plan that combines life insurance and market-linked investment opportunities to help you achieve your long-term objectives and provide for your family financially in the event of the unthinkable. Depending on your objectives and tolerance for risk, you may invest in equities, debt, or a mix of the two.
● Money-Back
Money Back Plans pay out a certain proportion of the plan's total benefit at predetermined periods. This is referred to as a survival benefit.
● Child Plan
A life insurance policy with an investment component that offers financial assistance to your children. After the death of single or both parents, the death benefit is payable as a lump-sum payout as per policy terms & conditions.
● Retirement plans, often known as pension plans
Retirement plans are a combination of investment and insurance coverage. A percentage of the premiums is used to build the policyholder's retirement fund. After the policyholder retires, this is offered as a lump-sum payout as per the plan’s terms & conditions.
Wrapping Up
Examine your current insurance plans on National Insurance Awareness Day. It will assist you in identifying any coverage gaps. Determine whether your insurance requirements have changed because of changes in your life circumstances, such as the addition of family members or your older age by using the Life Insurance Calculator. Also, look at your present assets and see if any changes are necessary. Insurance knowledge can aid you in better preparing for life's unpredictability. As a result, set aside some time to consider reviewing and renewing your insurance to ensure the financial security of your loved ones.
Sources:
1India Protection Quotient (maxlifeinsurance.com)
BJAZ-WEB-EC-00605/22
