Five Reasons Why People in India Don’t Buy Life Insurance

December 05, 2019

Five Reasons Why People in India Don’t Buy Life Insurance

In India, a lot of people avoid buying a life insurance policy mainly because either they don’t understand the importance of insurance or they believe it is an unnecessary expense. Read on to know about the five reasons why people in India don’t buy life insurance.

As compared to the countries in the west, insurance is still a growing industry in India. Over the years, the number of people buying a life insurance cover has increased significantly, but still, a large number have no insurance protection. People in India avoid buying life insurance cover either because they have a misconception about the different insurance products in the market or they believe it is expensive. Listed below are a few common reasons why people in India don’t buy life insurance.

Ignorant about the financial risks

In India, most people prefer to stay in denial thinking that ‘nothing will happen to me’ and hence they prefer to stay self-insured rather than buying an insurance policy to get protection against the risks. Also, a vast portion of the population in India have minimal or zero knowledge about the financial risks of not having sufficient insurance coverage.

No understanding of insurance products

Today, the insurance companies in India offer different types of insurance products to suit the varying needs of the customers. However, the availability of different options often confuses the customer, and it makes it difficult for them to choose the right plan to suit their needs. There are some plans, which protect against emergencies, and there are other plans like the Unit-Linked Insurance Policy (ULIP), which provide the dual benefits of protection and opportunity to invest in the money market. So, based on your personal choice and the coverage you need, you can choose the right policy.

Insurance provided by the employer

This is one of the most common reasons why people in India avoid buying a life insurance policy. Many organisations in India provide an insurance cover for all their employees. However, you must know that the insurance offered by employee provides only basic benefit, and it may not be enough to suit your needs. Also, the insurance provided by the employers may not cover all your family members. So, to ensure full protection to your family, it is important that you buy a personal insurance cover even if the employer covers you.

Good health

A lot of people in India put off buying life insurance because they believe that they are young and healthy and don’t need insurance. If you too think this, you must know that while you are young and healthy, it is the best time to buy insurance as you can get the insurance at a lower premium rate. If you delay buying insurance until old-age, you would have to pay a higher premium.


In India, having life insurance is not mandatory. Also, there is no law regarding the right age to buy an insurance cover. People don’t consider protection a priority and tend to believe they can buy it later. But, research suggests that four out of ten households where the family is dependent on a single earning member, face difficulties to meet the household expenses in case of the breadwinner’s death. If you put off buying insurance now, in case any eventuality or unexpected and untimely demise, it can cause financial hardship to your family.

Another common reason why people in India avoid buying life insurance is that they believe it is expensive. However, the truth is that it is quite affordable for all. You can buy a term life insurance policy for a premium as low as INR 500 per month and get protection up to INR 5 lakh.

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