Many of my friends and relatives still do not have adequate health or life cover.

Q. Many of my friends and relatives still do not have adequate health or life cover. When I ask them to take, they somehow postpone it forever. I wonder why do they do that!

A. Possibly there could be the below 5 reasons for not taking insurance cover at all or procrastinating it forever:

(1) No benefit can be seen either physically or even in the paper during a lifetime. Some investments, like gold or property, have a physical presence, whom we can touch and feel. Other investments, like Mutual Fund or stocks, have a paper value but we can convert them to currency anytime if need be. Pure insurance does not fit into any of these. Hence it does not excite us to go and get or feel good about.

(2) To feel the real need of insurance, we have to be little imaginative, apprehensive and fearful. These are the character traits that we otherwise mostly avoid in life or feel negative about. This lateral shift in thinking often requires time, effort and persuasion by a third party.

Q. So we have been discussing why people say ‘No’ to insurance, even when they don’t have adequate cover. First two reasons we discussed are – not finding any material benefit or immediate gratification, and no wants to think about negative or catastrophic possibilities. What are the other three reasons? 

(3) Not aware about costs to incur or funds that will be required otherwise, if adequate insurance cover is not there. Very few of us come across or become aware of rising medical costs or lifestyle expenses, that we or our family members may have to face in case of any mishap. 

(4) Thinking that employer-provided insurance cover is enough. Unfortunately during a time like this many of us do realise that how fragile such cover can be and why we shouldn’t depend on them solely. 

(5) Finding insurance products and its claim process as quite confusing and complicated – which it is not necessarily.

Bonus Reason for procrastination - nothing has happened so far, then what bad can happen suddenly even if I postpone it (buying insurance) by a month or two!