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Thread on #insurance. Those who think Insurance is a scam, a scheme for milking money and et al. No am not saying that those who think this way are wrong but let me clear few misconceptions and myths on Insurance. Am part of this industry for a long time.
Health Insurance: If one doesn't have insurance, can he set aside a regular every month to provide for that rainy day, when money will be required to pay for health care. People in the very high income brackets, but people from lower income to upper middle income class, can they?
As an individual may be one can, but can you provide for a family of 4 to 6 including parents? And will that money that you set aside in a bank - does it not have opportunity cost?
Instead of saving Rs. 3 to 4 Lakhs per year (so that you have a financial cushion at the end of 5 years, is it not better to pay around Rs. 20k for a family of 4 and invest the remaining balance in an investment?
Other challenge: Medical Inflation is hovering at around 12 to 15% plus. And the current pandemic is witnessing a minimum expense of Rs. 3.00 to Rs. 3.50 Lakhs for hospitalization and medicines.
Have seen many lower income persons such as Taxi Drivers who have gone into deep debts because they could not afford their families' hospitalization (esp. operation charges).
Ask the people whose finances were not impacted by having Insurance. As people in business, whose business who were able to recuperate out of a Fire / Flood / Storm / Earthquake.
Insurance operates on the law of large numbers and probability - that losses of few are borne by many who are more fortunate. I have settled businesses that have been disrupted due to Fire, Riots (in Gujarat - lotsa them) and because of Insurance they have survived.
The money that Insurers get as premiums gets invested in markets through treasury operations and in that they support the economy.
#TradeCredit Insurance: These days, Export Houses are exposed to the risk of receivables - that is also insured to a large extent.
#TransitInsurance: Imports and Exports are supported by way of Transit Insurance. Your exports will come to a grinding halt but for insurance. Insurance and Banks play a key role in revolving of money.
Ask those families, where upon the passing away of the breadwinner, how #LIC has come to the rescue by dispersing funds very quickly. There are some excellent plans from LIC. How each considers them is a different point. And I respect it.
My thread is a gentle reminder that seeks to remove misconceptions and misunderstanding. Am ready to questions on Insurance especially Non Life. There are people in any system who constitute the black sheep but the entire system can't be called a scam or a fraud.
If by the example of few rotten politicians, if we call the political system a rotten one, then by the same token, we have a Narendra Modi, an Amit Shah, or an Annamalai or a Tejasiv Surya. We also had a Sushma Swaraj too. What do we call them?
