Life Insurance in India
India has one of the lowest penetration of life insurance of under 3.5 %. But many of us have a number of policies for which we dutifully, pay premiums every year but don’t know for sure if we it is useful or not. Even as a finance professional, I have made a number of those rookie mistakes, so I can totally understand how gullible one can be to those pitches.
So let us examine, some basic questions to help us guide through these decisions.
What is insurance?
Insurance contract ensures the policy holder is compensated for his loss when a certain event happens. So extending this definition, we can say a life insurance is a monetary compensation for loss of earning potential due to death or disability.
This simple definition provides us all the necessary understanding required to evaluate a policy. So let me try and break this done into a checklist.