National Insurance Awareness Day: What Are The Protection Gaps In Insurance In India? Are You Adequately Covered?

How Can Policyholders Ensure They Are Adequately Covered? It’s now widely known that if you or your family are not insured, you might have to pay a heavy price for it. In the event of an emergency or the sudden death of the chief earner of a family, the entire savings can be wiped out in a day. Along with that, there could be loss of property and vehicle, gold jewelry too. Having lived through Covid, a global pandemic, it’s high time we make sure our insurance coverage is in place, before everything else. This is the right time when policyholders, insurers, and insurance industry stakeholders must all come together to address this issue. According to the NIA report, despite perceiving life insurance primarily as an investment product, 67 per cent of customers still prefer savings for the future, tax benefits, and safety. Many do not opt for mortality protection coverage, leading to a high protection gap. While most policyholders believe their coverage is adequate, perceptions vary across demographic segments. Younger and middle-aged customers wrongly perceive adequacy, emphasizing the need for education on risk protection. Private and government sector employees generally believe their coverage is sufficient, potentially due to employee benefit schemes.“Policyholders should look at coverage that is comprehensive and also takes care of critical illnesses. Treatments of diseases like cancer, transplants, and strokes can be in multiple lakhs if not crores. Having a policy that can cover the cost of these illnesses is a must and therefore policyholders should aim to cover at least Rs 20 lakh of insurance cover. They can supplement their existing insurance through super top-ups that can be an affordable way to ensure high coverage,” adds Parekh.

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