Five myths of Indians about Insurance – which cannot be uprooted

India is known to be a country of umpteen cultures and demographies. Language and cultural diversities naturally should impart a divide among the Indian population and has to be reflected in their views and behaviour.
surprisingly this is not the case when Indian views about Insurance is analysed. They are united to such and extent as if the beliefs are moulded centrally using a single cast.
Let us have a look at these deep rooted beliefs which I dare to call as myths.

1. Me and my family is Risk Proof.

Beliefs and thinking pattern of Indians are by and large inherited from the great Vedic age, which taught us to be optimistic, irrespective of the ups and downs of life. This great thinking which added to the inner strengths of Indians had helped them to reach and succeed in this global world.

This inherited optimism help them to stay reasonable while considering about getting insured against risks and other unfortunate events which may occur in their future life also. It helps them to stay blind to the unfortunate news events flooding around them in media.

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2. Insurance Policy is just another investment platform

It is very easy to make an average Indian to invest his hard earned money in any crap with a single requisite. Just an offer of unbelievable returns after a period of time can trigger a voluntary action leading to investment. He will not ask a word about the reputation of the firm. No logical questions  regarding the possibility of the offered returns has to be answered. They will even believe that any Tom, Dick and Harry can supply a Lollipop Smart Phone with all the goodies embedded in it for just 251 bucks.

He strongly believes that any money set aside for future is just another deposit to earn interest, and insurance cannot be an exemption. So any insurance has to naturally accompany a maturity return. Insurance companies are forced to create plans keeping this in mind.

Indians will forgive a murderer but not a person opting for term insurance. For him the person is insane to invest in a platform with zero returns even if it can provide security and peace of mind, for his loving family.

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3. Returns from my insurance policy should exceed bank returns.

Another great quality of Indians is the ability to compare any thing to possibly everything in the scenario. I remember an advertisement where a military chief explains the innovations and advantages in a gigantic military ship, to a concerned military person, who lead the purchasing team from India. The leader of purchasing team could not resist the temptation to ask one final question ‘Ye Kithane dethe he?'(what’s its mileage?). He cannot avoid comparing the enormous ship to his scooter in terms of mileage.

Naturally Insurance is head to head compared with bank deposit. At the time of purchasing an insurance an average Indian  naturally likes to get convinced himself that he is investing at a higher returns than the bank rate. All insurance benefits of policies taken is ignored and risk premium allocated for insurance by insurance company is forgotten for ever.

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4. I will take a policy for my Child but not for me.

Family is the greatest strength of Indian culture and an average Indian live his life just for his family. He wants all his property to be inherited by his children and grand children. The nature of assets transferred will not make any difference. Be it his estate, Hercules cycle or the cot he has been using in his bedroom . He is ready to sacrifice anything and every thing, if that can make his loved ones happy. This rule works in case of Insurance also. He is ready to relinquish the advantages of taking insurance on his own life, just to see an innocent smile in the face of his kid as he hears , “I have taken a new policy in your name my son.”

Questions like, What you are planning do with the money you get if something unfortunate happens to your child or Who will pay the insurance premium of your kid tomorrow, if something unfortunate happens to you are not asked and will remain unanswered for ever.

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5. I will take insurance when it is needed.

Indians generally hate to buy things which they cannot use today. This rule creeps in to his head when he think of buying a Stepney tyre for his car or wasting five hundred bucks for a helmet which he may not probably use. He will himself consider wise in saving the cost of a tyre or a helmet and he will advise his friends and relatives also against the wastage of money. At times he can even be happy at the hospital bed massaging his bandaged head for not wasting his hard earned money for a helmet, provided he is still alive and not in a comma stage.
An Indian will whole heartedly agree about the importance of getting insured as and when, getting insurance is no longer an option for him. But any way there won’t be any regrets for wasting the opportunity.

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Final word

These beliefs or myths which live deep rooted in the minds of Indians have, time and again influenced the insurance marketing in India .The statistics on insurance penetration and the prospect of tapping one of the largest free markets in the world was successful in luring insurance majors from all over the world to India. Expectations to reap rich profits in a short period has received unexpected set backs, thanks to the so called Indian beliefs and mind sets.

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Anish L J

Anish L J

He is a Finance, Insurance and Software consultant with more than 18 years of experience in these fields. He thoroughly follows developments in insurance and finance. 'Our LIC' ( is his endeavor to provide simple and solid solutions internal and external customers of Life Insurance Corporation of India.

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