Term Insurance is important irrespective of the generation. The only difference is changes in the social and economic scenarios which have increased the necessity of having term insurance.
The financial replacement of an individual is Term Insurance according to me. Now let us look at its relevance.
- Each individual living on this earth needs money to survive
- There is an earning member in each family who is responsible for taking care of the survival of his family members
- Imagine if something happens to that earning member, who will now take the responsibility of the other family members
- If other family members are capable enough to take care of them, term insurance may not be required, but generally it is not the case
- Families generally tend to sell their assets/investments for their daily livelihood or have to borrow money from friends/relatives in the absence of earning member
One might think earlier also above-mentioned instances were relevant then why is it gaining popularity now and not before?
The question is valid but now let’s look at the change in our dynamics which has made it prudent to have Term Insurance.
- Earlier people used to live in joint families. And in each family, there were at least 2–3 earning members. Now we live in a nuclear family, and normally only 1 member is earning
- The requirement in earlier times was fundamental like food, clothing, and shelter. But now each requirement has a different dimension. Food includes cuisines, clothing involves brands and shelter includes various facilities like TV sets in each room, AC, 3-door refrigerator, etc.
- Marriage or functions were generally low-key affairs. Although no.of relatives was generally higher arrangements were fairly simple
- Education did not require a huge chunk of money
- And many more items like vacation, retirement, vehicle 2–3 wheeler, etc…..
One family member himself toils very hard to make his/his family ends meet, how can he now look after another family of his brother, sister, or another family member?
Hence, having Term Insurance has started gaining popularity nowadays.
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