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Friday, October 30, 2020

COVID-19 fatalities maximum amongst working class – time to invest in term insurance

In India, a maximum part of the working population that includes both salaried class and self-employed individuals fall under the 30–59 age bracket. And considering the above-mentioned figures, it is important that people falling under this age bracket must get themselves insured by buying a comprehensive term life insurance policy.

September 30, 2020 5:46:00 pm
Term insurance is the best product for every person falling under any income group as the plan protects the dependents of the life insured in case of his demise. (Representational)

Written by Santosh Agarwal

The global confirmed case tally of COVID-19 currently stands at 31 million (3.1 crore), with over 7 million (70 lakh) active cases and over 24 million (2.4 crore) recoveries. The global death toll has now crossed 9.8 lakh with the US having the greatest number of deaths.

In India, there are now over 5.6 million (56 lakh) reported cases, of which 17.15 per cent, or roughly 9.7 lakh cases are currently active and over 90,000 people have lost their lives to the virus, the third-highest death toll in the world.

Most productive age hit the hardest

While there is some good news that India’s COVID-19 recovery rate has crossed 81 per cent mark, there is some bad news as well. Unfortunately, the ongoing pandemic is eating up India’s workforce.

As per the Health Ministry data, while people in the age groups above 45 continue to be at more risk from COVID-19 in terms of fatalities, as many as 43 per cent deaths have taken place in the relatively younger age bands of 30-44 and 45-59. The data showed that people between 30-44 years and 45-59 years — comprising of 37 per cent of the country’s entire population — registered 43 per cent of the total COVID-19 deaths.

Another study by the International Institute of Population Sciences (IIPS), Mumbai, found that over 50 per cent of COVID-19 deaths in India have occurred in the 40-64 or 35-64 age groups – the most economically productive age group in India. The findings of the study even concluded that the proportions of death due to COVID-19 in the age group of 30-64 years add up to 58.5 per cent while it is 53.5 per cent in the age group of 40-64 years.

The IIPS is an autonomous body under the Union Ministry of Health and Family Welfare.

Protect your dependents with term plan

In India, a maximum part of the working population that includes both salaried class and self-employed individuals fall under the 30–59 age bracket. And considering the above-mentioned figures, it is important that people falling under this age bracket must get themselves insured by buying a comprehensive term life insurance policy.

While this is true that people above the age of 60 years and those with pre-existing conditions are at the highest risk of dying due to COVID-19, it is important for the working individuals as well to take necessary precautions and at least invest in a term plan to financially protect the future of their dependents.

Term insurance is the best product for every person falling under any income group as the plan protects the dependents of the life insured in case of his demise. For similar reasons, term life insurance would also be suitable for a person who is the sole breadwinner in the family and has fixed income.

Term insurance is also suitable for anyone who has taken large loans like housing loan, car loan, etc. Such people can cover the risk of their untimely demise even before repaying all the loans by taking term insurance which is cheaper than the other types of insurance. It is the cheapest way to protect your future income from the risk of your dying before you have earned it.

Most importantly, unlike health insurance, term plans come with a zero-day waiting period that means once the policy is issued to you, the plan starts providing coverage from the very same day. Under a term plan, the entire sum assured is given to the dependents in case of the demise of the life insured. The customers can choose the payout option as per their individual needs and benefits.

Cover available at affordable prices

A 30-year old individual can buy a term life insurance plan with Rs 1 crore sum assured with coverage up to 70 years at a monthly premium as low as Rs 1,000. The same plan can be bought by a 35-year old individual for a monthly premium of Rs. 1,200. The monthly premium for the same plan for a 40 and 45-year-old individual will come around Rs 1,500 and Rs 2,000 respectively.

Customers can choose the sum assured, the payment term, and the coverage period as per their individual needs and requirements. The payout option can also be customised as per specific needs.

 

The author is Chief Business Officer- Life Insurance, Policybazaar.com. Views expressed are that of the author.

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