As responsibilities start kicking in anywhere between the mid-20s and early 30s, it is always taken on with much enthusiasm.
The realisation – that one’s life is valuable not just for oneself but more so for the loved ones – marks the shift in thinking from ‘main se hum’ (me to us). The assurance provided by life insurance allows the transition of ‘main se hum’ to happen in a joyous fashion.
Youth is filled with energy; it is widely believed that one is often more concerned about self than even family members and close friends in this phase of life. Interestingly, as responsibilities start kicking in anywhere between the mid-20s and early 30s, it is always taken on with much enthusiasm. As one gets a job, there is joyous realisation of managing one’s own finances. For other life stages, when one starts paying off bills for the household, gets married and starts taking care of his/her partner, becomes a parent, and takes on the responsibility of a family, there is a sense of happy responsibility to take care of the family. Along with undertaking this responsibility comes the realisation of the need to protect self for the sake of family. A realisation that one’s life is valuable not just for oneself but more so for the loved ones.
In every part of the journey moving forward, one’s thinking evolves from an individual perspective to thinking for the family as a unit, this marks the shift from ‘main se hum’. The ‘hum’ frame of mind overrides every decision making aspect – whether it is as simple as – planning a weekend or as big as buying a house. With the joy of thinking for ‘hum’, also comes the realisation of growing responsibilities and need to protect the family. This could potentially have a sobering effect on many, and rightfully so. Yet, the decisions are always made with a ‘hum’ perspective. Hence it is important not to lose youthful approach to celebrate life. When the shift from ‘main se hum’ happens, insurance plays an important role of taking care of one’s protection needs, essentially providing the peace of mind required to continuously take on new responsibilities at every life stage, with the same youthful zeal.
One of the simplest and most efficient ways to ensure financial protection for one’s family is to opt for a pure protection plan. During the transition from ‘main se hum’, as a child, a spouse, a life partner or a parent start depending on you and your income, you need to get life insurance; it is a symbolic commitment to the future well being of your family. The assurance provided by a protection plan allows the transition of ‘main se hum’ to happen in a joyous fashion.
A pure protection or traditional term insurance policy ensures that in the event of an untimely death of the policyholder (the person who buys the policy and pays premiums) during the policy term, the insurance company pays out the insured sum to the nominees or survivors that help them tide over financial hardships. This financial instrument is truly a must-have in each individual’s life because a term plan offers a large cover at a low cost. To ensure adequate financial protection for the family to maintain their lifestyle, as a thumb rule one must opt for a cover which is about 10 times the annual income.
Once secured in the safety of a traditional term plan, one must consider safeguarding against steep healthcare costs in case of a critical ailment. Studies indicate that about 55 million people in India slip into poverty every year on account of healthcare expenses. Thanks to our modern lifestyle, 61% of deaths in India today are attributed to Non Communicable Diseases (NCDs) like cancer, diabetes and heart ailments. The nature of critical ailment is such that one’s ability to work and earn is impacted. Hence, apart from the physical hardships associated with a critical ailment, financial unpreparedness leads to emotional turmoil for the whole family. Having a critical illness cover is a cost effective way to safeguard against the realities of modern lifestyle.
In today’s day and age, for the transition of ‘main se hum’ to happen in a joyous way, it is important to have both traditional term plan and critical illness cover for a holistic protection. The good news is there are hybrid protection plans available which combine traditional term and critical illness in a single policy. As one’s age progresses, savings go up and liabilities tend to reduce while there is a higher probability of suffering from a critical ailment. Hence with age the need for a life cover goes down while that of a critical illness cover goes up.
One should opt for a comprehensive cover which provides life-stage auto-rebalancing of Life and Critical Illness cover. The plan works in the following way: The Basic Sum Assured is split between Life Cover Sum Assured (SA) & CI Sum Assured (SA) in the proportion of 80:20 respectively, at the inception of the policy. With each subsequent policy anniversary, there would be an increase in CI (SA) and an equal decrease in Life Cover (SA) such that the total cover remains constant throughout the term.
Along with the comprehensive coverage, such a product offers waiver of premium upon diagnosis of critical illness. This ensures that one does not need to worry about premium payments during difficult phases of life. Upon diagnosis, not just the lump sum applicable i.e. CI sum assured is paid but also the life cover becomes constant (auto-balancing ceases) and continues without payment of future premiums.
While we’ve looked at the perils of modern-day lifestyle, it also comes with some perks. Today, it is easy to buy a policy online from the comfort of one’s home. All one needs to fill is the proposal form and medical declaration form. It is important to remember, since the objective is to ensure protection for the family, it is imperative for an individual to disclose all relevant details to the life insurance company. This will ensure that the family gets the requisite financial protection it needs, and the claims are not rejected on grounds of incorrect disclosures. It is equally important to buy a life cover from an insurance company that has earned its trust.
As they say suraksha yani ‘main se hum’ ka kadam, protection truly is the step from ‘main se hum’.
(By Ravindra Sharma, Chief of Brand and Corporate Communications at SBI Life Insurance)