‘Insurance is needed, but I don’t need it.’
That’s the view most of us adopt when the topic of insurance comes up. We feel disaster and unforeseen circumstances do happen, but feel that we can remain untouched by these. As the last two years have shown us, being complacent or being in denial can no longer help us when misfortune strikes out of the blue.
Insurance can safeguard both your future as well as your family’s. It can no longer be treated as a choice, but as a necessity.
Currently, the penetration of insurance in India is low, and that’s a discouraging sign. The Economic Survey 2021-2022 revealed that life insurance penetration went up from 2.82% in 2019 to 3.2% in 2020. As per definition, insurance penetration is measured as the percentage of the total life insurance premium paid in a year to the Gross Domestic Product (GDP). Although the penetration of insurance increased, it is still very low. What the survey revealed is that people got themselves insured, due to the fear and uncertainty that came along with Covid-19.
Why is India largely uninsured?
As per official industry data by the Insurance Regulatory and Development Authority of India (IRDAI), 75% of all Indians are not covered by any form of life insurance. This means that they can be left in a lurch, in case financial instability hits them, in the event of unexpected events like the death of the breadwinner in the family.
The situation is even worse in the case of the unorganised sector. As per the statistics revealed by the International Labour Organisation, 82% of India’s workforce is employed in the informal sector, which also means that such a large population lives in the constant fear of financial setbacks.
There are three standard metrics that are considered to understand insurance cover: annual premium growth, insurance density, and insurance penetration.
While the current data reveals that India’s insurance penetration is at par with the emerging economies of the world, there are no specific insights available on the number of unique individuals covered, variation across income classes, and other critical parameters. Moreover, we still don’t know if the insurance cover is adequate to cover the financial shocks.
It isn’t just the vulnerable sections of society that are uninformed; even educated individuals do not have a proper idea of why insurance is necessary. The need of the hour is more awareness about the need for insurance and how it helps our lives. Once you do your research and zero in on the policy you desire, you can then easily purchase insurance online or through an agent.
As we go along, this piece will shed light on a form of insurance — namely term insurance — that offers financial protection to the policyholder in case of the death of the insured.
One of the simplest ways to get insured is to invest in a term insurance plan. By paying a certain premium every month, policyholders can enjoy financial protection and safeguard the future of their families, even in case of their demise. The premium you pay is dependent on a range of factors such as age, gender, term, sum assured, and more.
Term plans also offer various tax benefits on the premiums paid, under Section 80C of the Income Tax Act. In addition, the death benefit received under the plan is also deemed tax-free under Section 10 (10D).
But here’s another challenge — with so many options available today, how does one zero in on the right term insurance plan?
Choosing the right term plan
Among the many choices available, it is important to go for a plan that caters to your needs, and provides your family with adequate cover, in your absence. Moreover, a credible name also helps to establish trust. That’s exactly where HDFC Life Click2ProtectLife steps in.
The plan offers customers an option to avail cover for their entire lifetime, or one could opt for a steady stream of income post-retirement by offering income payouts, age 60 onwards.
What’s also impressive is that HDFC Life Click2ProtectLife assures policyholders an additional sum in case of accidental death, and a waiver in premium, in case of critical illness. What’s more, the plan also offers tax benefits as per the existing laws.
There’s another important aspect to take note of. In case the policyholder survives until the maturity of the plan — he/she could opt for the return of the premium option.
HDFC Life Click2ProtectLife also offers add-on riders with your insurance. The policyholder can avail of additional income benefits other than the sum assured, in case of total permanent disability after an accident. Policyholders also receive a lump sum amount, which is equal to the sum assured, in case the policyholder is diagnosed with any of the specified critical illnesses.
The plan also offers special premium rates for women and non-tobacco users.
The last word
Having life insurance, as we have already established, is not a choice but a necessity. It could help you and your family stay afloat during financial duress, and act as a cushion in such times. So, wait no more and invest in the HDFC Life Click2Protect Life plan that ticks all the right boxes!
