This is a sad example.
And of a close relative of mine.
Without disclosing the real identity here, I hope this example can help convince those – who still have doubts about having a big enough life insurance cover.
Almost a decade back, one of my relatives died unexpectedly at a not-so-old age of 44 years.
Apart from the emotional upheavals that the family had to go through, there were few other big problems:
- He did not own a house and was staying on rent in New Delhi – a costly city.
- He was the sole earner of the 4-member family.
- Son was 16 and daughter was 9 years old (both studying and years away from earning themselves)
- Wife had never worked before.
- Sadly, he did not have much savings.
- Worst, he did not even have a decent enough insurance cover. (Just a couple of lacs in useless endowment policies. No cover from his private employer too).
Today after almost 9-10 years of his death, the situation is still not great. The family of three still stay in a rented house, the son has only recently started earning decently and daughter is yet to complete her education. After death of the person, his wife did try to seek employment but it did not work out.
You might be thinking about how then they were able to sustain for so many years? Lets just say that our extended family pitched in and did what was necessary. But I hope you got the picture.
Now read through the list of points (i.e. problems) above again.
Read it?
You would agree that it was an extremely sad and all the more scary situation to be in.
I completely understand that there is no point trying to look for faults in past action of people. But there are others that need to realize the importance of life insurance today.
How different would have been the family’s situation if this relative of mine was properly insured?
A lot different…
Maybe, the money received from insurance could have been used to purchase a house (no future problem of rent). Or it could have helped in paying the exorbitant fees of the children. Or it could have helped provide for everyday expenses of the family. Or all of these!
That is what insurance is there for. Isn’t it?
Its not for tax saving. Its not for investments. Its not for savings. It is there to help the family after death of the insured person.
I know this example is not uncommon. Lacs of people die every year without adequate life insurance. Sadly, it is their families that have to bear the consequences.
Many feel that a small cover (of lets say Rs 5 or 10 lac) is enough. In a way, they are saying that having an ‘inadequate’ life insurance is still preferable to dying with zero life insurance.
I agree. But not completely
When one can easily buy a big enough cover (Rs 1 Cr life cover can be bought in less than Rs 10,000 annually), there is no excuse to having an inadequate life cover.
If you are well covered and know how much life insurance is right for you, then good for you. But if not, then you are not being responsible to your family. No excuse whatsoever can justify your stand of being under-insured.
Just try visualizing a scenario of your own death – imagine the issues your spouse, kids and family will have to face just to maintain their current life style and achieve other financial goals.
You will feel like you have been punched in the face.
Taking care of your family even after your death is your responsibility (atleast to an extent). Don’t shirk it.
PS – If you know someone who still doesn’t believe in life insurance, do share this article with them. The more people read this, better it is.