What are the top reasons people delay buying Life Insurance?

According to figures reported in the IRDAI Annual Report 2024–25, Life Insurance penetration in India was 2.7% of GDP in FY 2024–25, compared with 2.8% in the previous financial year. People often delay buying Life Insurance because they feel healthy, assume their employer’s cover is enough, worry about premiums, or find the available plans confusing.

Whether you need cover depends on your financial responsibilities, including who relies on your income, your outstanding Loans, and the resources your family could access if you pass away.

Why do people delay buying Life Insurance even when their family depends on them?

People may focus on immediate expenses and underestimate how their family would manage without their income. Rent or Home Loan payments, household bills, education costs, and support for parents can continue even when the earning member is no longer there. If someone depends on your income, estimate how much support they may need and for how long before deciding whether life cover is appropriate.

Do you need Life Insurance if you are young and healthy?

Your current health is only one part of the decision. If you have dependents, shared Loans, or financial commitments that would affect others, life cover may be relevant even when you are young. Premiums are influenced by factors such as age, health, smoking status, cover amount, and policy term, so the cost of applying later may differ. Eligibility and pricing are determined by the insurer’s underwriting assessment.

Is Life Insurance too expensive?

The cost depends on the cover you choose and the insurer’s assessment of your application. Instead of relying on a general premium example, estimate the amount of cover your family may need and check quotes for suitable options. GST on Individual Life Insurance was reduced from 18% to 0% effective 22 September 2025, according to the Government of India’s Department of Financial Services.

The exemption applies to Individual Life Plans. Group Policies generally continue to attract 18% GST. The premium itself still depends on the policy and applicant.

Is employer-provided Life Insurance enough?

Employer-provided Group Plan can be useful, but check the amount insured, who is covered, and how long the benefit lasts. The cover may be linked to your employment and may not be designed around your family’s full financial needs. Compare the group cover with your estimated requirement, and consider whether a separate individual policy is needed. Review the Group Policy terms rather than assuming that the benefit will continue if you change jobs.

Does having enough savings and assets mean you do not need life insurance?

Savings and assets are part of your family’s financial resources, but they may not be immediately accessible or sufficient to meet all future needs. Consider your liquid savings, outstanding liabilities, regular household expenses, and future commitments together. A Life Insurance Policy can provide a death benefit if the insured person dies while the policy is in force and the claim is payable under the policy terms. It should complement, not replace, a realistic assessment of your family’s needs.

How do you choose Life Insurance when the options feel confusing?

• Start by identifying what you want the policy to help you achieve.
• If your primary goal is to provide a death benefit to your dependents for a chosen period, a Term Insurance Plan is worth exploring.
• If you want to build savings alongside life cover, you can look at Savings Plans.
• For long-term financial goals with market-linked returns and associated investment risks, explore ULIP plans.
• If you are planning for retirement, Retirement and Pension Plans may help you explore options for generating income after you stop working.
• Before choosing, compare the policy term, sum assured, premium-payment conditions, exclusions, payout options, and any applicable charges.
• Consider whether the plan aligns with your financial goals, budget, and responsibilities. You can also use the ABSLI term insurance calculator to estimate your cover needs.
• Always review the product prospectus and policy terms before making a decision.

Also Read

• How to Update Nominees and Beneficiaries in Your Life Insurance Policy
• What Effect Does My Medical Condition Have on My Life Insurance Rate?
• Questions to Ask Before Buying Life Insurance
  
  

References

1. IRDAI, Handbook on Indian Insurance Statistics 2024–25

2. Press Information Bureau, Insurance Sector Performance

3. Department of Financial Services, Exemption of GST on Individual Life and Health Insurance Policies