Need for insurance in a changing world

We believe in Vasudhaiva Kutumbakam, the old Sanskrit phrase meaning the world is one family. The technological advancements of the 21st century have truly made this true. We are living in a very interconnected world. Every place and every person is today well connected to each other, digitally and even physically with linkages to the remotest places on the earth. All this time we enjoyed this connectivity, accessibility, the interdependency of business and all the comforts of the modern world. However, we are now shocked and quick to realise the perishability of this new world.

The past decade has seen nature responding back to the unadulterated infiltration on it. We have seen the impacts of climate change manifest itself in many forms. Millions are being already impacted and signs are there that things will only worsen in the coming decades. Just in the past few months, we have seen earthquakes, cyclones, deadly fires and of course the world-changing pandemic. Needless to say, Covid-19 is a game-changer for everyone. It will change how we work, socialise and perhaps also respect nature. One industry has been at the forefront at helping people manage the risk emanating from uncertainty and it is insurance. While there are many forms of insurance which help different stakeholders to manage risks, we limit our focus to only personal insurance in our discussion.

At a personal level, we are concerned only with the direct risks faced by us. Covid-19 has surely made people realise the importance of having adequate health insurance. However, health is just one part of our vulnerability as humans. Let us first fully understand these vulnerabilities or risks of our lives in the form of 3 deadly Ds.

• Death

• Disease

• Disability

The above 3 D’s are pretty obvious and any common person can imagine the impact of any one of them happening on our lives. Death, especially of any earning member in a family is disastrous in all manners, financially the most. 'Disease' is something which has perhaps become very common today given the lifestyle and food habits we are following today. And without adequate support from the government to the middle and the aspirational class of the population, getting quality treatment is getting damn expensive. But what if you survive any unfortunate incident but … Disability has huge ramifications on our lives which many of us haven’t visualised. It may severely hamper our earning ability for life and add to ongoing medical costs. Have we accounted for them?

To this shortlist, we can do well to further add another two Ds – Damages and Dependency. Damages would mean damages/losses to movable or immovable properties or assets. This can be your home, shop, factory, godowns, vehicle, crops, cattle and so on. Again very self-explanatory. They are prone to human acts, accidents and also acts of the ‘god’ or natural calamities, which are getting a bit common now.

Dependency is a new word for many but perhaps the only one on the list which is almost certain and very worrying. Dependency comes from the risk of being alone and/or from longevity or living longer. It is something which we cannot really buy an ‘insurance’ against. The idea of being dependent on others for care and treatment and even for living our daily lives may be frightening for many of us today. The dynamics of the modern world and how a modern nuclear family chooses to live, in contrast to our previous generation, is something we will have to think about. Now imagine doing so without adequate resources or wealth at your disposal. That puts us in a precarious position. Perhaps the Covid-19 may have a positive impact on the same. If earning opportunities are available closer to home, many immigrants would prefer to work from home or closer to home. We will have to wait and see. But the safest way out of it to create a sizable, retirement corpus. That would be also enough for the rest of your life at a retirement home of your choice if needed.

So where are we today? We have only made ourselves more vulnerable in this modern world. We haven’t evolved as humans. All our technological advancements in all fields lay worthless as an unknown enemy made the most evolved and most powerful species, us, realise our weakness and vulnerability. It is not the end of the world though, and we will survive and we will again prosper. However, things will not be the same again. What we need to do is to do a recheck and value the most important thing in our lives - our health, both physical and mental. We need to take care of it. Financial protection in the form of insurance is no longer in a debate. Having adequate life, health, personal accident and critical illness insurance should be your next ‘To Do’ task. There are enough digital ways of buying the same at the comfort of your home. Just call your insurance advisor for a comprehensive review of your insurance portfolio. It's high time you do it.