When you hear insurance, you scream blue murder. There is even a joke attributed to the irrepressible Captain Haddock of Tintin comics, who before slamming the door on the face of an insurance agent says, “The only thing I am not insured against is the insurance agent.”

Why is this object of public welfare so frowned upon? Professional estimates peg the number of insured Indians at a mere 5 per cent of our population.

WHY THE RESISTANCE

There are two reasons for the cold shoulder given to life insurance in general.

One is that agents mis-sell the products in order to achieve business targets. They contravene the guiding principle of the code of conduct for agents which expressly sanctions a need-based selling of insurance.

Second, people may be chary of immersing themselves in a pecuniary scheme that reminds them of their own mortality. A tertiary reason could be stinging on money for a future untoward event, when they are surrounded by the concerns of the present.

But such considerations apart, insurance is firstly an effective means of saving money for the future. Like a recurring deposit in a bank, you accumulate premiums with the insurer that is paid back as the sum assured on survival along with an additional bonus amount, that is earned as interest.

The interest is invariably higher than a piffling bank deposit return, one that barely offsets rising inflation and loss of monetary value.

USEFULNESS OF INSURANCE

There are policies that service the varying needs of different people. For the moneyed, there are traditional plans that accrete deferred savings.

For those in need of periodic payments, there are money-back plans and child plans which pay neat packages intermittently. More adventurous people choose market-based products. Retirees opt for annuities. Hospital insurance safeguards a person against the unexpected travails befalling an otherwise healthy human being.

Thus an entire range of human needs and wants are addressed by life insurance policies, which protect us from the consequences of ‘black swan’ eventualities.

A recent advertisement on TV features the agent of an insurance company who doesn’t hesitate to speak the truth about potential returns to a prospective client.

It seeks to right the image of the much-maligned insurance salesman, who is caricatured in people’s minds as a person who puts his own expediency before that of his client’s.

When the client seeks to know what returns he can expect, the insurance agent counters with the response that insurance is also a long-term savings plan.

Insurance, then, is not to crimp on taxes, neither to hedge his bets on earning a big buck, but rather to protect himself and his dependents in the probable event of stoppage of his income flow.

(The author is a Kochi-based freelance writer.)

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