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The Greeks and Romans introduced the origins of health and life insurancewhen they created guilds called benevolent societies which cared for the families of deceased members. England nurtured a concept of “friendly societies" in which people donated amounts of money to a general sum that could be used for emergencies. Many such stories will show that man always finds ways and means to protect his family regardless of the society, culture or era he belongs to.
Currently, the industry experts may complain about the low insurance penetration in India, but one should not forget the savings culture which is deeply rooted inside us. Indians are known to save for the rainy days and handle the situation themselves. So even though they haven’t purchased an insurance policy, they would have kept some money aside for emergency expenses. But off late, this habit of savings is also showing a downward trend.
Growing number of people are borrowing money to improve their standard of living and enjoy modern day benefits. Gone are the days when an individual would accumulate money for more than two decades and then buy a house of his own. Now, as soon as a person starts working, he/she is on the lookout for a loan to buy a house or car. Such lifestyle changes have made insurance of paramount importance.
Unfortunately, people are not so proactive in seeking life insurance. It is only when they witness some incident around them or feel threatened at an older age, they start realizing the need for an insurance cover. It is important that one avails an adequate term insurance cover as early on in life. This will ensure that the dependent members in the family will continue to receive money even if the breadwinner is not around. Term insurance not only takes care of loss of income for family but also works well to pay off home loans and huge debts, if any.
The cost of health care is rising at an alarming rate and one cannot afford to drain out 3 to 5 lakhs from the savings fund every year towards medical expenses. Therefore, a comprehensive health insurance policy for the entire family is a must for all.
Additionally, one should also plan for future expenses such as child education, marriage, post-retirement living expenses, etc. The idea is not to put aside all what you have and compromise in the current standard of living but it is to ensure that you save enough today to retain the same standard of living always.
Source: InvestmentYogi is one of the leading personal finance websites in India
