How the need for Term Life Insurance in COVID-19 has gain importance?
COVID-19 has changed numerous things in our surroundings, starting from lifestyle habits, hygiene practices to our daily schedule. One of the drastic changes that have taken place during this pandemic is people’s mindset towards life insurance policies. It is now no longer considered as a tax-saving or investment tool; instead, everyone has started taking it seriously.
Due to this sudden occurrence of pandemic and a rise in the risk factor, the demand for life insurance and health insurance has significantly increased. To be more specific people are opting for pure protection plans like term life insurance over savings-linked life insurance policies. In simple words, we can say that the need for term life insurance in COVID-19 has been redefined. The same change is revealed by India Protection Quotient- Express (IPQ – Express) survey by Max Life Insurance.
The survey was conducted across 25 cities, six metros, nine Tier-1 and 10 Tier-2 cities with a total sample size of 1,864 respondents between the age group 25 to 55 years, including both males and females. Its findings are quite interesting as the survey states that the ownership of term life insurance is the highest as compared to other categories of life insurance products. In metros, the term insurance ownership is at the top with 41 percent against the ownership of market-linked products at 22 percent and endowment products at 39 percent.
Term life insurance is the simplest and pure protection plan among other forms of life insurance policies. Under term insurance plan, the family of the insured gets a lump-sum amount which is also called the death benefit upon the untimely demise of the policyholder within the term of the policy. However, there is no maturity benefit if the policyholder survives the policy tenure.
The customers have renewed their interest to buy term life insurance policy online. They are becoming more aware of protection products and thus towards the need for term life insurance in COVID-19. Overall, about 83 percent of respondents believe that the current circumstance demands to be more proactive regarding financial planning. The findings of IPQ Express highlights that 41 percent respondents mentioned that they would buy term life insurance because, with the increase in the spread of COVID-19, it is essential financially protect their family in case of the untimely death of the breadwinner of the family. At the same time, 37 percent revealed that they intend to buy term policy due to the rise in uncertainty.
This is in absolute contrast to the traditional mindset of people of choosing unit-linked insurance or endowment policy over term insurance plan. So, earlier people were in a view that their plan to buy term life insurance policy online is a waste of money. Due to the simple reason, that term plans don’t offer any maturity benefit against the other plans’ offering which include savings benefit as well as the death cover, even though the term life insurance plans are cheaper than the ULIPs and endowment plans.
Moreover, the reason behind this renewed interest in the need for term life insurance in COVID-19 can be attributed to unemployment and growing day to day medical expenses. Lack of job security, concerns about business, unstable income flow are the critical factors for the growing anxiety among people. The households have been witnessing rising healthcare costs and declining income in this COVID time which has pushed them towards planning their finances in a better way.
Also, in the current COVID situation, the lack of adequate funds in case of critical illnesses is causing more anxiety among people. As per the survey, 31 percent of respondents in metros and 20 percent in Tier-1 cities have purchased life insurance with COVID-19 critical illness rider.
IPQ Express also revealed that people are now more concerned about financial, medical and job security in the absence of the sole earner as compared to the time before the pandemic. About 43 percent of customers have started focussing on saving more while their necessary expenses have either gone down or remained the same.
With this trend, the online insurance aggregators like BimaKaro.in have witnessed a substantial growth this year. Interestingly another critical trend that has come up in this pandemic is the increase in telemedical. The customers have started adopting digital services like telemedical with open hands, probably because they have understood the need for term life insurance in COVID-19.
Therefore, we can say that looking at the rise in uncertainties, every individual should think about safeguarding their loved ones in their absence. And nothing can be better than term life insurance. If you haven’t planned yet, this is the right time to analyse its importance and move further to make the buying decision. In case you want to gain more information on the same, then visit BimaKaro.in, get quotes as per your eligibility, compare various plan from top insurers and buy term life insurance policy online today.