Not aware about insurance

Obamacare is all about a law which mandates most of the Americans to purchase health insurance, or pay penalty.

With the Supreme Court of the US approving the measure, it has now become a law, which among other things, will afford health protection to those who have not insured themselves.

Back home, even after the opening up of the insurance sector way back in 1999, there is little awareness on the benefits of insurance. There are about 24 life insurance and 27 non-life insurance companies in India, most of which have tied up with foreign partners — thanks to the foreign direct investment allowed to the extent of 26 per cent in the insurance sector.

Not just death

Even after so many private players, the current data reveals that only 10 per cent of the market is tapped. There is a misconceived notion among the people that insurance is synonymous with death.

Anyone with a family to support needs life insurance. In view of the economic value of their contribution to the family, housewives too need life insurance cover.

Even children can be considered for life insurance in view of their future income potential being at risk. The extent of life insurance coverage will depend on factors such as the number of dependents, debts or mortgages, if any, the kind of lifestyle one would want to provide to the family, the money needed for children’s education, and one’s ability to set aside the sum.

Likewise, health insurance is important, as technological advances, new procedures and more effective medicines have driven up the costs of healthcare. Health insurance can make a lot of all this more affordable.

No culture

Despite the availability of various kinds of life insurance and health insurance polices to suit varying needs, the insurance sector has not grown. Lack of awareness or poor campaigning by insurance companies could be a reason for sluggish growth.

While people are more interested in investing in gold or fixed deposits, and shares, it is only insurance that provides protection to the entire family.

What’s more, there are tax benefits to be had with payment of premium. Besides life and health, insurance is available for motor vehicles, property and travel abroad. The Insurance Regulatory and Development Authority can be expected to redress complaints, since it is committed to the spread of insurance.

The absence of a culture of insurance in the country is the main stumbling block to the growth of the sector.

(The author is a freelance writer.)

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