A large part of our population is living without an insurance cover as India’s life insurance penetration rate is just 2.74 per cent. If you are among those who are yet to get a life insurance policy, HDFC Life Sanchay Plus is a great option as it helps safeguard against unforeseen events.

Despite the uncertainties that the Covid-19 pandemic brought for Indians and the number of lives that were unexpectedly lost, a large part of our population is living without the security of an insurance cover. As India celebrates its 74^th Republic Day, it is time to reflect on this insurance coverage gap that the country is battling with, and what we can do to safeguard our loved ones against financial insecurity.  

According to figures compiled by the Insurance Regulator and Development Authority of India (IRDAI), the life insurance penetration rate in the country is just about 2.74 per cent, which is one of the lowest in the world. 

Furthermore, the sums for which insurance is taken is also way below what is needed to protect a family from the financial setback in the event of death of the earning member. According to industry and government data, an average Indian family is only assured 8 per cent of what they would actually need. This is much lower compared to the rest of the world where the insurance coverage adequacy stands at 44 per cent for Japan, 67 per cent for Australia and 84 per cent for Taiwan. 

The situation is even more grave for those in the unorganised sector, which brings additional risks in the form of income volatility, hazardous working conditions and no benefits to protect against illnesses or old-age. For this part of the population, the financial set back can have far reaching implications on the family. 

Even in rural India, where agriculture remains to be the dominant profession, the penetration of insurance – both life and non-life – is very low despite the fact that the financial stability of this population is impacted by risks of volatile weather conditions like droughts or floods, health exigencies and natural calamities like cyclones. 

Why are we falling short?

There are many factors for this low penetration. Indians lack awareness about the importance of an insurance and putting their money to buy an insurance policy – life or otherwise – is often seen as a wasteful expense. Another major reason is an overdependence on the insurance agent to decide what kind of insurance is right for you. In such a scenario, the agent may end up selling policies that offer higher margins for them. But, these may not necessarily be the best pick for the insured out of the array of products available in the market. 

Another major mistake people end up making is not choosing the amount of insurance wisely. One must ensure that the sum of money that you will get in the event of an exigency must be enough to offer financial security to help tide over the testing times. THE IRDAI should publish data on coverage and sufficiency of coverage to create more awareness amongst the masses about protection margins so that people choose the policies that are right for them.  

How HDFC Life Sanchay Plus is a fit in

If you are among those who are yet to get a life insurance policy, the HDFC Life Sanchay Plus is a great option as it helps safeguard you against unforeseen events that could cause financial insecurity for you and your loved ones. The plan offers guaranteed returns at the end of the set tenure, which you can opt to take as a lump sum or as a regular income at pre-defined intervals like monthly or quarterly. 

If you opt for the Life Long Income option, you are guaranteed an income till you turn 99 years of age. Alternatively, you can choose the Long Term Income option, wherein you have a guaranteed income for a fixed term of 25 to 30 years. In all the plans, you are also eligible for Death Benefit wherein a fixed amount will be paid out in the event of unforeseen death of the insured. In addition, you also gain from taxation benefits under section 80C & 80CCC that you become eligible for when you buy the HDFC Life Sanchay Plus plan. 

The best part about this life insurance policy is that it offers the benefits that an investment brings in terms of the guaranteed income that it promises on the annualised premiums that you pay for the policy term period. It also offers the flexibility of choosing the term period – this can range between 5 and 13 years. At the end of the payout period, the policy terminates by returning the Total Premiums paid. You then have the option of receiving your gains – the Guaranteed Sum Assured on Maturity – either as a lump sum or small amounts at pre-defined intervals.  

You can also enhance the protection by opting for Riders such as HDFC Life Income Benefit on Accident Disability Rider, or HDFC Life Critical Illness Plus Rider that cover you against accidents or a critical illness. 

Disclaimer: This article has been produced on behalf of the brand by HT Brand Studio