-By Vibha Padalkar, MD & CEO,
The last two years have changed the way the world lives. We have seen rapid changes in lifestyles and a shift in working cultures across the globe. Some of the biggest challenges that individuals faced were related to financial security such as loss of jobs, unplanned medical expenses, loss of a breadwinner and at times loss of the ability to work due to prolonged illness. When we look back at the whole experience, and even as the entire situation evolved over time, a need that has emerged strongly is that of financial security.
Why Life Insurance?
As a culture, we Indians relied on the concept of ‘joint family’ for a long time as we were an agriculture dominated economy. However, along with increasing urbanisation we see an increasing trend of nuclear families in recent years. Nuclear families are exposed to higher emotional and financial risks which were naturally mitigated to an extent in a joint family setup.
We came across an insight related to joint families during a recent study ‘Life Freedom Index’(LFI*) that validated the above hypothesis. The study was done in July 2021, with a focus on the prevailing pandemic situation. It was observed that metros and nuclear families were more impacted while smaller cities and joint families had seen more stability.
*(LFI assesses the current state of financial freedom of urban Indian consumers, their awareness about available products, sufficiency and adequacy of financial planning, and above all, their current state of financial freedom.)
As a family, whether joint or nuclear, one must be prepared to deal with health and financial emergencies. This is where life insurance comes in.
It all starts with a plan
With increasing life expectancy and declining birth-rates, by 2035 the proportion of India’s elderly population is expected to double in size from what it was in 2015.
Have you given a thought as to how you want to spend your life after retirement? As a working individual, you usually limit your focus to goals such as purchasing a house, and funding your child’s education but often neglect the need to plan for your golden years. Retirement planning is a critical aspect of your life, but in most cases it is one of the most neglected aspects. If you start planning early about how you want to spend your life after retirement, you would be financially independent and also better prepared to manage health related expenses on your own. It is imperative that you understand the need for this early and start planning towards it.
Life insurance is for everyone
Life insurance companies offer different products to protect you from the three risks of mortality, morbidity and longevity. Term insurance ensures that your family gets a replacement for your income, critical illness policies protect you and your family’s finances in case of diagnosis of a wide range of serious diseases, and annuity policies ensure that you have a regular income stream for life.
Once these three basic requirements are addressed, you know you have created a safety net for yourself and your family. That makes it easier for you to focus on your long term goals with complete peace of mind.
Also, it is necessary to be aware that life insurance is equally important for both men as well as women. It is a common misconception that only men are the bread earners and hence they need to be secured. Today, women are equally responsible for their family’s financial wellbeing.
When you have planned financially for dealing with emergencies and uncertainties, you are in better control of your future. There could be external factors that are not in your control; however, your plan would be the safety net protecting you and your family from the financial impact. Life insurance gives you the opportunity to plan and be prepared. Use the opportunity that you have now and be safe in the future.