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Plan Ahead To Live And Leave Well

Financial needs are unique to your distinct life-stage and risk-appetite, and will acquaint you to your own levels of financial discipline

Photo Credit : Subhabrata Das

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Dr Seuss's words, "You are unique, just like everyone else", rings true more than ever today. Across categories, firms are working towards realising unique experiences and products that resonate with a growing breed of instant-gratification-seekers. I have choices in everything today - from curated travel experiences, down to the way I'd like to pay to one of these order-in, food-tech startups, and I'm not complaining!  

Empathy design is now even part of elements across insurance value chain and in the manner in which products are conceived. But even as customer centrism has permeated into the industry, a range of mindsets still haunt the idea of "insurance", among us Indians.

In my fairly long-standing experience I've learnt, the prejudice varies depending on the customer type, which has nothing to do with his or her age. It has everything to do with the knowledge levels and unique experience of the customer. I have my own list of "customer segments", to drive home my point.  

"    The Newbie: Remains unexposed or is entirely new to the concept of financial planning. Despite having some monetary independence, has no concept of planning finances - not necessarily someone, who's only recently begun earning.

"    The Doubter: This is your classic skeptic, someone with a reason to be perennially in doubt. He may never have experienced benefit of any sort, which perhaps explains his inherent lack of trust.

"    The Dabbler: This person is forever experimenting - a policy from one insurer today, another tomorrow. He will not stay committed or honour policies long enough to experience its benefits.

"    The Fresher: With his friends or family buying insurance for him, or due to some level coverage offered by his employer, the Fresher has had a brush with insurance or other financial tools. All through, the person hasn't applied himself, but is generally aware of this thing they call insurance, and has yet to experience its merits.

"    The Steady: This person fully understands and therefore, believes in insurance. He knows that as against being a one-time transaction, insurance is a contract wherein, if the insurer has a commitment, so do he as a customer. So, he goes by its terms and remains steady.

"    The Veteran: A seasoned individual who is not just well-aware, but has come a full circle, through receiving some form of insurance claim, say from a policy's maturity, or as a beneficiary. He has actual appreciation of its benefits.

Whom do you identify with, from the above personas?
If you don't see yourself among the last two personality-types, it is recommended you mull over what the astute Veterans understand, and what keeps the Steady, steady? Maybe, begin by understanding the mutually contractual nature of insurance, while also taking in the perspective of benefits, as realised by the last two groups. If you could think of a Steady or a Veteran in your own circles, a good step up would be to learn how they gather their financial knowledge? If you are a Fresher you already have a start! Take your policies, study them, and gain a broad, conceptual understanding.

"It is not death that a man should fear, but he should fear never beginning to live", said the great Roman emperor, Marcus Aurelius, and I cannot agree more. When one has plans in place to sustain in the face of possible adversities or anticipated lifestyle changes (a growing family, retirement, etc.), just as well as planning for death, one will perhaps have no reason to despair. A person chooses his plans as per the needs and goals he aims to fulfil. The tenure of the plan, age, circumstances, life-stage and risk-appetite will have a bearing on individual portfolios.

You'll be gratified when you're able to discern by yourself, the end-benefit of products in your portfolio - which could be a pure-risk policy (example, endowment, money-back or other traditional plans) offering guaranteed returns, thus, aimed at transferring the uncertainty of life, or could be Unit-Linked, designed to also build savings for the lifespan, beyond covering for this certainty that is death. Besides, it will be clear as day to you, that your financial needs are unique to your distinct life-stage and risk-appetite, and will acquaint you to your own levels of financial discipline.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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life insurance opinion

RM Vishakha

The author is Managing Director and CEO, IndiaFirst Life Insurance

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