Navigating Uncertainty: The Vital Role of Life & Health Insurance During COVID-19 and Economic Recession
Globally, most industries are struggling in the wake of the COVID-19 pandemic. Today, health concerns and worries about the future weigh heavily on every family. This unprecedented crisis highlights the critical need for financial planning, covering future liabilities, unexpected expenses, and liquidity.
Why Financial Planning Is Essential Right Now
The world is facing two pandemics: COVID-19 and a recession. Financial experts warn that the economic downturn could be even more damaging than the virus itself—so far, 195 million people have lost jobs worldwide, and many more may join them. In India, the migration of laborers from cities is slowing down factory restarts, further impacting production.
With industries facing recession, life insurance and health insurance have seen only a minor hit—and demand is surging. People are now more vigilant about safeguarding their family’s future, with life and health insurance purchases reaching record highs.
Insurance Products Gaining Popularity
- Term Insurance:
Affordable protection for families if something goes wrong. For instance, a one crore sum insured policy for an 18-year-old starts at just Rs. 816 per month. Numerous add-ons are available: accidental cover, critical illness, return of premium, increasing or decreasing sum insured, and more.
- Whole-Life Policy:
With built-in liquidity, policyholders receive a yearly cash bonus until age 100. Premium terms are flexible—5, 10, 15 years or pay till age 60—offering both lifetime coverage and easy cash access.
- Pension Plans:
Post-retirement security is now top-of-mind as “living too long” is a real financial risk. Variants in the market help retirees ensure steady income and safety.
Life Insurance: An Attractive Investment Option
Aside from traditional protection, life insurance can help build assets. With banks lowering interest rates and mutual fund returns unstable, life insurance offers guaranteed benefits and capital security.
Is Life Insurance Safe?
Absolutely. No Indian insurer has ever become insolvent or failed to pay policyholders. The Insurance Act of 1938 provides strong safeguards, with strict IRDA rules ensuring only secure investments for policyholders’ money.
Read more:
Benefits of Life Insurance
- Family protection in case of death
- Asset building
- Post-retirement benefits
- Tax-free returns
- Tax savings (Section 80C)
- Security & peace of mind
Benefits of Health Insurance
- Covers unexpected medical expenses (including COVID-19)
- Tax savings (Section 80D)
- Peace of mind
