National Insurance Awareness Day 2022: Protection, safety, security has become more synonymous and important than ever. Their importance has been highlighted in the recent past. Although we take many steps to ensure the good health and well-being of ourselves and our families, unfortunate circumstances often arise without our noticing. Many times we are completely unprepared for the same thing. We must consider scenarios beyond our control, whether it is a health emergency (like this pandemic), a natural calamity (which now strikes one day in the same place more than once a year) or of an accident. If you look at it holistically, it’s important to secure your health, home, vehicle, possessions, or whatever else you value and the best way to do the same is through insurance. . The more foresight and planning we can undertake, the better prepared we will be to mitigate these challenges at very minimal cost. On National Insurance Awareness Day 2022, Anand Pejawar, Deputy Managing Director, SBI General Insurance, shares his insurance insights and explains the importance of ‘Financial Security’.
“There are multiple avenues to build one’s financial health. One can choose to invest in bank/post office deposits, mutual funds, stock/real estate market investing, gold investments, real estate or buying insurance policies.Among all these avenues available, insurance gives you financial stability and security in the face of adversities.Beyond the same health insurance, the added benefit is saving money. ‘tax.The current pandemic has already shown us how these factors, which are beyond our control, can cause a double whammy by affecting one’s financial situation and causing more damage financially while having a huge impact on one’s health. as well,” said Anand Pejawar.
Insurance, its notoriety and its scope
“While the past two years have certainly boosted insurance awareness, overall insurance penetration levels and more in the non-life insurance sector are still quite low in the country. (The rate penetration is measured as the ratio of written premium to GDP) General insurance penetration was around 1% in FY21 (according to Swiss Re data), however, the global average of 4.1% indicates that there is a large majority left to insure and secure. The country has experienced such cases before and how the common man suffered due to underinsurance. Chennai floods, Chennai floods, J&K, Uttarakhand floods, cyclones hitting Konkan, Odisha belt year after year, etc. The gap between economic losses suffered and insurance claims received was huge, thus clearly indicating this large protection gap The reasons are many:
Problem of knowledge and understanding: a greater part of the population finds that insurance is a difficult subject to understand
Type of distribution and scope: they rely on individual interactions with intermediaries to simplify the concept for them
Considering it a waste of money: some also feel that putting their money in insurance is not beneficial if they do not claim
Reach and accessibility: Much of India also does not have ready access to product insurance information
While it is important to simplify the concepts of insurance, it is also essential to explain its meaning, characteristics, advantages and benefits to people. The common man should be able to understand the true benefit of insurance in simple terms. Insurance awareness can be achieved through:
· Simplification of insurance – Information on insurance and insurance products/solutions should be simplified with the urban and rural population in mind
Conduct outreach programs by insurers – Outreach programs/drives through channels/formats understandable to the country’s diverse demographics are essential.
Insurers need to talk to the end consumer through digital engagement channels, information portals, simple, local “Nukkad Nataks”, or simple conversations, but we need to talk to them in the language they know and understand.
Appropriate training and increased reach of intermediaries – Since there is a high dependence and reliance on intermediaries for insurance knowledge and information, intermediaries should be properly trained (both knowledge products and processes, including soft skills) to bridge this gap. A strong network of intermediaries in semi-urban and rural areas will also greatly contribute to awareness and penetration.
· Use of technology to increase reach – Although it is easier to reach the urban customer through various communication channels, technology needs to be leveraged and simplified to reach the rural customer as well. With the reach of 4G technology in rural India, this is now easily possible,” added Pejawar.
He further explains, “There are different types of insurance that secure various aspects of people’s lives, such as:
Investing in a reliable health insurance plan ensures that you are prepared to the best of your ability, financially, to deal with any unforeseen health emergencies. It allows you to choose quality medical treatment without having to worry about medical costs. Almost all health insurance plans cover your whole family (family floating feature), so instead of opting for separate policies for each individual in the household, you can even choose a family floating policy, which is more advantageous .
Motor insurance is compulsory for all vehicle owners under the provisions of the Motor Vehicles Act 1988. This policy protects you from financial liability both for damage to your vehicle and for a third party incident. In the event that someone is unfortunately injured or third party property is damaged, this plan covers the financial cost.
It is always advisable to opt for a comprehensive plan in which you get coverage for damages due to accidents, fires and even theft. There are several add-ons to choose from such as Roadside Assistance which you can use to request assistance in the event of a vehicle breakdown.
A comprehensive travel insurance plan will protect you from any sudden eventualities (travel, medical or otherwise) and is especially useful if you are traveling abroad. This will take care of expensive medical bills you may have to pay while abroad. It also protects you against other risks during the trip, such as loss of checked baggage, loss of passport, missing connecting flights, hotel reservations, etc. travel safely and without any tension or loss.
Home insurance provides you with financial security in the unfortunate event that your home is damaged due to an outside factor. Under various plans available, your family members as well as your home contents, electronic items and jewelry etc. are covered. To protect your home, paying a small annual premium to keep it safe and secure is ideal for protecting it from the unexpected.”
He further explains, “Beyond these, there are many other policies that cover other valuable things. Due to the pandemic, schools were closed, children were studying from home. Most people were working from home (WFH).The use of internet and WiFi was at its peak.Currently, almost all your money transactions are done from your mobile.This has led to an increase in cyber fraud; where good cyber insurance can come in handy.Similarly, there are insurance policies for the rural sector – like farmers can insure their crops, livestock, tractors, farm equipment… Traders can insure their shop, craftsmen can insure their tools and equipment… Basically, you name the asset you care about and there is an insurance policy to ensure its protection, safety and security.”
“Insurance is the first step in building a solid foundation for your financial stability and security. As our experiences over the past few years have taught us, undertaking rigorous financial planning is of paramount importance to ensure that your finances do not crumble under the intense pressure of all events.In today’s world, INSURANCE should be an important part of your overall financial investment portfolio.This awareness day to insurance, understand the importance of insurance, read why insurance is needed and how it can help protect your life and the life of your family Before choosing an insurance plan, understand the features of the plan, what benefits you can get out of it and what benefits you might get out of it, if any. Once you are satisfied that the chosen plan can support your “NEEDS” / ” Requirements” and only then choose a good insurance policy that will give you the much-needed “peace of mind” in all circumstances. So choose wisely and make an informed decision today.”
(Disclaimer: Opinions/suggestions/advice expressed here in this article are investment experts only. Zee Business suggests its readers consult their investment advisors before making any financial decisions.)