Notes on Inequality #31.
A humble suggestion to the life insurance industry.
Why shouldn’t ₹25 lakh of life cover (Term Plan) be made easily accessible and affordable to economically vulnerable families? The minimum sum assured offered by most of the companies is ₹50 lakh.
Consider Ankit, an auto driver earning ₹20,000 a month, supporting his parents, wife and child. If he dies, the insurer pays a tax-free death benefit of ₹25 lakh to the nominee. This payout replaces major part of the lost income and could generate about ₹14,600 a month (an FD @7% interest).
Life insurance is needed most by families who can least afford the financial shock of losing their breadwinner.
For people with informal or irregular incomes, income-proof requirements can also be a hurdle. Simpler documentation could make life insurance more accessible to them.
A sudden death should not push a struggling family deeper into poverty.
#PersonalFinance #LifeInsurance #FinancialProtection #Poverty #IRDAI
