Madan suggests some ways that can help people better understand the importance of term insurance in their financial plan, including how to determine if they need the same
Term Insurance is seen as a significant tool for financial security, especially for those individuals who are the sole breadwinners of their families. This aspect was highlighted as a critical key to financial planning by Sumit Madan, chief distribution officer, Axis Max Life Insurance at Outlook Money’s 40 after 40 Retirement Expo.
Speaking during a session, ‘Insurance Wakeup Call’, Madan said 65 per cent of Indian households have only one breadwinner, which makes term insurance essential as without it, families could face financial distress.
However, data shows that the penetration of life insurance has been falling in recent years. The latest report notes that the insurance penetration for the Life Insurance industry marginally declined from 3 per cent in the previous year to 2.8 per cent during 2023-24.
Madan says several factors such as a lack of awareness and financial education among the population and cultural attitude towards ‘death’ could be a possible reason behind this decline.
Buying a term plan is not always as simple as picking a number and calling it a day. To truly protect one’s future (and that of their families), people need to take a hard look at their long-term insurance needs.
Madan suggests some ways that can help people better understand the importance of term insurance in their financial plan, including how to determine if they need the same. Watch this video to know more.