Life Insurance Awareness

Table of Content

1. Key Objectives of the life insurance awareness campaign

2. Why should life insurance be the first step in your financial planning?

3. Benefits of Getting Life Insurance Early

4. Types of Life Insurance Plans Available

5. How to Choose the Right Life Insurance Plan?

6. Common Myths about Life Insurance – Busted

7. Life insurance awareness campaign – A Movement for Financial Security

8. FAQs about Life Insurance awareness campaign

The low penetration of life insurance, considering the vast population in the country, sparked the launch of the life Insurance awareness campaign. As per the annual report of Insurance Regulatory and Development Authority of India (IRDAI), life insurance penetration rate stood at just 3.7% during 2023-24 financial year^^. This indicates the non-captured market in the country and the need to create awareness about the importance of life insurance among the masses.  

What is important to understand is that the lack of life insurance leads to financial instability in a family when the unexpected occurs. These are times when steady income ceases. Even today, in several families, a cultural hesitancy to discuss death and money exists, and life insurance takes a backseat because it is not viewed as a necessity.  

The life insurance awareness campaign has been launched to change this very mindset of people. It aims to make life cover a priority, especially for first-time life insurance buyers, to be financially equipped when the unfortunate happens.  

Key Objectives of the life insurance awareness campaign 

The life insurance awareness initiative has been launched to change people’s approach towards life insurance. The key objectives of the campaign include: 

• Bringing awareness about financial security through life insurance and helping them understand why life insurance is important.  
• Influencing first-time policy buyers and young individuals to invest in life insurance early and leverage the benefits of high coverage for low premiums.  
• Debunking the myth that life insurance is for older individuals and those seeking tax benefits.  
• Emphasizing the financial empowerment acquired through life insurance to increase the overall insurance penetration in India.  

Why should life insurance be the first step in your financial planning? 

The reasons why life insurance should top the financial planning list are the increasing cost of living and rising uncertainty. The average living expenses at Rs. 1.47 lakhs per month for a family of 4, the death rate at 7.47 for every 1000 persons, and rising medical costs all warrant the need for life insurance to be financially protected. ^{(2) (3)}

Imagine the plight of the family when the sole breadwinner dies unexpectedly, leaving behind no savings or any kind of financial security. Even if the emotional trauma fades, the economic insecurity crops up without any income for sustenance.  On the contrary, the death benefits from a life insurance policy protect loved ones from a financial crisis and help them live comfortably even in your absence.  

Rishi, a software engineer, the sole earning member, married with two children, worked hard to give the best for his family. In the bargain, he incurred debts for the expenses. Sadly, he missed out on life insurance for future planning. He passed away unexpectedly leaving his family with the burden of debts. A life insurance policy would have averted this situation and ensured family protection even when he was not around. 

Benefits of Getting Life Insurance Early 

Buy life insurance early to reap the following benefits: 

• Lower Premiums at a Younger Age

At a young age, you are healthier, and the probability of a claim is lower. Since the coverage is for longer periods and the risk involved is lower, the insurance premium is also lower and makes investing in life insurance early cost-effective. 

• Long-Term Finance Discipline

Investing in the best life insurance plan as a young earner involves a long-term commitment. Premiums must be paid regularly for a longer period to keep the policy in force. This instils a long-term financial discipline and gives peace of mind that your family’s financial future is secure.  

• Greater Coverage Options 

Buying life insurance for family security at a young age means fewer health issues and lower risk for the insurance company.  You get long-term security without burning a hole in your pocket.  

Types of Life Insurance Plans Available 

The different types of life insurance plans available are: 

• Term Life Insurance

Term insurance for salaried or self-employed professionals, HUFs, etc., provides coverage for a specified period, typically ranging from 5 to 30 years**. If anything, untoward happens during this period, the beneficiaries receive a lump sum payout as a death benefit. The plan does not have a maturity benefit. This is the most economical plan, providing higher coverage at an affordable premium. 

• Whole Life Insurance

A whole life insurance provides life cover for an entire lifetime, provided you pay premiums regularly. The plan safeguards your family against eventualities and serves as a tool for your financial future.  

• ULIPs (Unit Linked Insurance Plans)

ULIPs are plans that combine both life insurance coverage and investment components. This is an ideal life insurance plan for young adults. Staying invested for longer periods helps create a substantial corpus while keeping the family protected for the long term. This plan provides life insurance for self-employed as well and has premium payment options to suit their cash flow. 

• Endowment Plans

Endowment plans are a combination of life cover and savings component. The policy provides death benefits and maturity benefits. It is an ideal option for individuals who prefer a financial shield for their family while creating a corpus for their financial future.  

• Child Plans

Child plans support the two important milestones of children, i.e., education and marriage. The life cover component funds your child’s requirement in your absence, while the maturity benefit creates a corpus for a sound financial future.  

• Retirement Plans

Retirement plans are pension plans designed to help individuals secure their post-retirement life. It is an avenue to create a corpus for financial goals and generate a regular income stream for financial independence after retirement.  

How to Choose the Right Life Insurance Plan? 

Inadequate coverage does not serve the purpose of financial protection. You have to invest in the best life insurance plan that aligns with your financial goals, risk profile, and timeline. Here are some tips for choosing the right life insurance plan: 

• Assessing Your Financial Goals

List out your long-term and short-term financial goals. Assess the funds needed for each of them. Explore plans that provide adequate returns, aligning with your goal. Evaluate the coverage required to create a corpus that supports your goals.  

• Evaluating Coverage Needs

Estimate the life insurance needed to cover your family’s requirements. Consider the household expenses, the loan EMIs, the education cost, and financial goals to assess the coverage required to help them maintain the existing lifestyle in your absence. You can use an insurance calculator to arrive at the regular savings required to provide the evaluated coverage needs.  

• Comparing Policies and Providers

Before investing in a life insurance plan compare various plans and insurance providers and choose a plan that aligns with your requirements and is affordable. Review the premium cost, charges involved, deductibles, exclusions, limitations, and claim settlement ratio of different plans and providers and choose the one that suits you the best.  

Common Myths about Life Insurance – Busted 

Life insurance is either an afterthought or avoided in many families due to the myths and misconceptions about the concept. Let us debunk some of the myths and uncover the truth of this essential investment.  

• "I’m Too Young for Life Insurance"

The truth is that the younger you are, the more affordable the premiums are. Investing in life insurance when you are young and healthy helps obtain higher coverage at an affordable rate. It is a prudent way of securing your financial future. 

• "It’s Too Expensive"

Life insurance is more affordable than most people think. It depends on how and when you plan your finances. Reap the benefit of higher coverage at affordable premiums by buying insurance at a young age. You can protect your entire family’s financial future for a nominal cost.  

• "I Already Have Insurance Through Work"

The employer-provided insurance is limited and may not be adequate to cover the financial needs of your family in its entirety.  Also, the coverage stops if you quit your job. A personal policy can be customised to your goals, risk profile, and timeline. You can also include life insurance for parents under the family floater plans.  It ensures uninterrupted coverage as long as you pay premiums regularly.  

Life insurance awareness campaign – A Movement for Financial Security 

Life Insurance awareness campaign is a nationwide campaign launched by the Life Insurance Council to create awareness about life insurance for financial protection and encourage every Indian family to prioritize insurance. The Sabse Pehle campaign is a collective voice of 26 insurance companies# for India insurance awareness. 

Through initiatives to broaden the reach, such as multilingual campaigns, OOH, i.e., Out of Home advertisements at metro stations and arterial routes, and dedicated microsites, it inspires trust and unity. The campaign emphasizes insurance for everyone and reminds that security begins with securing life and not through savings and investments.  

FAQs about Life Insurance awareness campaign  

Q. What is the Life Insurance awareness campaign About?

A. The essence of the life insurance awareness campaign is life insurance first, and the rest later. The objective of the campaign is to spread awareness about financial protection and increase the adoption of life insurance in the country.  

Q. Why is life insurance important to buy first?

A. It is important to buy life insurance first, as it serves as an income replacement for your family if something unexpected happens to you. It helps them manage household expenses, children’s education, and debts without a financial burden. It provides security when most needed.  

Q. How does life insurance protect my family financially?

A. If you have a life insurance policy, the insurance company provides a lump-sum payout as a death benefit to your family when you are no longer around. The payout helps them manage daily expenses, children’s education expenses, EMIs, and financial goals. Life insurance ensures that your family maintains the same lifestyle and lives comfortably in your absence.  

Q. Can I get life insurance if I’m young and healthy?

A. Yes. You can get life insurance when you are young and healthy. Buying life insurance when you are younger is recommended for longer protection at an affordable price. 

Q. How do I figure out the right amount of life insurance coverage?

A. Before buying a life insurance plan, factor in the monthly expenses of your family, the EMIs, medical costs, and financial goals to assess the right coverage. You can then use an online insurance calculator to estimate the savings required to create a suitable corpus over time.  

Q. What’s the difference between term insurance and other plans?

A. Term insurance is a pure protection plan and offers higher coverage at an affordable premium. Other plans like endowment plans, ULIPs, etc., combine life cover with savings and investments. They provide a death benefit and a maturity benefit. Term insurance is for a family’s financial protection, and the other plans are for life cover as well as wealth creation over time. 

Q. What happens if I miss paying my insurance premium?

A. If you miss paying your insurance premium, the life cover will end. However, it does not cease immediately after the due date. Every insurance company gives a grace period of 15 days for policies with a monthly payment frequency and 30 days for all other modes (quarterly, half-yearly, or annually) and your life cover will remain if you make the payment on or before the grace period.  

Q. How easy is it for my family to claim life insurance benefits?

A. Claim settlement is easy if all the documents are in order. Your family should inform the insurer within the stipulated time and submit the required documents along with the claim form. If you have honestly declared all the health issues, the claim process will be hassle-free.  

Q. Is it safe and easy to buy life insurance online?

A. The secure payment gateways and encrypted technology employed by insurance companies ensure that your financial data is kept confidential. So, it is absolutely safe to buy life insurance online. 

Q. Will my employer’s group insurance cover all my needs?

A. An employer’s group insurance coverage is generally limited and may not cover all your needs. Also, the cover does not have add-on benefits and ends if you quit the job. On the contrary, personal life insurance can be customised and offers protection till the maturity period.  

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