MyValueResearch

Need of Insurance in present day context

Though the word “Fear” and “love” encloses only four alphabets but have the vast difference meaning. If you are the bread winner of the family consisting of father, mother, wife and a child and don’t have significant economies, see the basic cost of life for those who depend on your income. Just for a second while your family is sleeping at night, throw yourself from the bed and stand at the corner of your bedroom. What will you see? You will see that your family is sleeping peacefully. Just think if something happens wrong to you or if there will be any ups and down in the business or you have to give up the job. Will your family ever sleep peacefully? I mean here in the same way that they are sleeping now.

We are living in the world of uncertainty. Time is precious; it never stops for any one and the same story goes continuous for all the people living on this earth. So the question arises here is that who will take your place or who will earn or from where will you make money and many more questions if something………… Unfortunate, decease is more expensive than most people believe, involving more than a few costs that many neglect to take into business relationship.

Yes, something is there but to some extend only who stands nearby to you and your family providing little hope. Yes, you have murmured the right word, “Insurance”. When determining if you need life insurance, it’s best to see your financial obligations. The enquiry isn’t, do I need life insurance? The real enquiry you should be asking is, would my loved will be able to earn all the expenses?

A thriving insurance sector is of vital importance to every modern economy because it encourages the habit of saving and provides a safety net individual. It is essential to plan for the future. The chances for a fatality or an injury to occur to the average individual may not be particularly high but then no one can really afford to completely disregard his or her future and what it holds.

People normally consider insurance as a scheme when and where you have to lose a lot to gain a little without knowing that it is the most reliable tool, which every individual can use to plan for his future.

Basically, life insurance is nothing but a contract where the insured party or the purchaser of insurance pays a premium that protects him against specific losses. While planning your life insurance portfolio, you must consider your family’s recurring needs like medical expenses, house rent, provision costs for instance as well as long-term needs that involve reinstating your family’s set standard of living and their future such as higher education and marriages.

Hence, insurance is essentially the means to financially compensate for losses that life throws at people – corporate and otherwise. Though an insurance cover can’t protect you against the emotional losses arising out of these risks, it softens the economic crisis that usually accompanies these losses. By choosing the right policy as per your needs i.e. customised solutions, you will be able to plan for a secure future for yourself and your loved ones because to identify the right plan basis your needs is the first crucial step towards insurance planning. But point to remember is that before buying life insurance, you need to do a little thinking and a lot of research. Once you have analysed your needs as per above classification, you need to then ascertain important factors such as type of cover, insurance amount as per one’s income, life stage, and dependents.

A young and healthy person with no bad habits, life insurance is affordable. Life insurance may be quite expensive or impossible for who is older, someone with a life treating illness, or someone with habits that could cause a health condition. Only you can decide if you can afford the premiums for a life insurance policy and whether the cost is justified.

The need for life insurance changes with the stages of life, starting with no need when you’re young, progressing to greater and greater levels as you take on more and more responsibility and finally beginning to diminish as you grow older, which is when you should commence planning for your retirement.

When you finally decide that you do need to purchase life insurance, proceed with caution. Be sure that you have understood exactly what you are purchasing, how it works, how it pays, and so on. There are many types of life insurance and what works for one person might not be right for another. So the first thing to do is that you should discuss your decisions with your family and ask the insurance agent to explain detail of the plan including time and tenure, policy premium term, sum assured, risk coverage, loan facility, tax redemption, benefits etc. These should be discussed properly and thoroughly so that no confusion creates later on. The main important thing is that you should choose only those policies, which are easily acceptable to you.

Previously people thought that insurance is only for saving purpose or which is getting only after the death or when the tenure is over or to save tax. As they were unaware of the mediclaim, educational plan, retired pension plan, and various benefits of it, they used to ignore.
But with the passage of time, opening up of insurance to private sector including foreign participation has resulted into various opportunities and challenges to the people. One shouldn’t forget that a well-developed and evolved insurance sector is needed for economic development. It is also fact that until the entry of private insurance companies like Reliance and Birla, the Life Insurance market in India was an underdeveloped market that was only tapped by the state owned LIC. The state owned LIC sold insurance as a tax instrument, not as a product giving protection. Most customers were under- insured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed.

All private insurers are forwarding the second phase of further plans as they have sustained the achievement quicker than their expectations. No doubt the aggressive attitude of private insurers is already paying rich dividends. But a rejuvenated LIC is staying nonchalantly these days even it is also trying to fight back to encourage new customers side by side.

Moreover now a day LIC is betting on its newly launched health insurance plan to achieve its growth target. The policy has benefits, which includes hospital cash benefit, major surgical benefit, and domiciliary benefit.

Conclusion: Life is a roller coaster ride and is full of twists and turns. It is a combination of sunshine and rain. We cannot take anything for granted. Here, Life insurance plays an important role in financial planning for many families. Insurance policies are a safeguard against the uncertainties of life. Life insurance, simply put, is the cover for the risks that we run during our lives. It protects us from the unforeseen events that could affect us. Thus, having a life insurance policy is very vital. Its cost varies based on age health habits and the amount of insurance. It is the only financial services product, which guarantees that a specific sum of money will be available at exactly when needed. During a financial emergency, policy loans may be taken and the full policy values may later be restored. Moreover the introduction of new products in response to changing economic conditions and consumer’s preferences is expected to continue in the future and vast range of people will be benefited.