REALITY OF INSURANCE PLANNING IN INDIA

In reality, people of India generally either under insured or over insured due to lack of awareness and misconceptions .We, Indian generally put enough time for research before buying any product for use but we have no time to think about importance and necessity of insurance. Some wrong conceptions about insurance are:

1. My Insurance premium is more than 1.5 lakh so I don’t need insurance : Some people belief that under Section 80-C of Income Tax, paying premium of Rs.1.5 lakh is enough for their life coverage or protection.Life insurance is not about how much premium we are paying but how much the sum assured or the coverage has been taken.
2. I am young and I can wait to get insurance : More you delay to take insurance more will be cost of insurance.Another point is always remembered accident, sickness and death will not inform you before coming.
3. I don’t have dependent so I don’t need insurance :To meet medical expenses, debt and to minimize the risk of disability arises due to accident even single person need proper insurance.
4. I have enough savings so I don’t need insurance :Investing without insurance coverage is not wise thinking.Insurance is first step to overcome uncertainty of future.
5. Insurance benefit available only after Death:This is true only for some products.Survival benefit linked products,Retirement benefit products are not after death benefit products.
6. Insurance is Tax savings tool : Maximum people in India think that insurance is only savings instrument to minimize tax burden.But that is not true, it is a part of financial planning which embedded with savings and can fulfill the tax purpose. So, insurance is multi benefited product.
7. I have group insurance so I don’t need life insurance further : If your job gone, then what will happen? Employer provides insurance according to rank & profile of the employee which may not sufficient for everyone.
8. I have already taken insurance so I don’t need further : Insurance requires need based approach on the income and   liability. So if income and liability increased, one need to revise of his/her insurance coverage.
9. Pure term insurance is wastage of money : In financial planning, for better investment option and flexibility, sometimes for some people with proper risk-profiling,term insurance may be most suitable product.
10. ULIPs are short term investment plan : This is not true in any case. Ulips are designed for those who have risk appetite with equity market volatility and have longer term view to generate money with added advantage of insurance and tax savings.
11. Belief of fate :Tendency of some people  to leave everything to fate is common in our country. They don't want to understand that our fate is depends on our own decision.