Underinsurance is as Good as No Insurance Says Aegon Religare Life Insurance

Advertisements in the insurance industry are common and historically, it has been seen they are aimed at convincing customers to buy insurance. Aegon Religare Life Insurance, in their new series of advertisements, featuring Bollywood actor Irfan Khan has touched upon a new and a very important aspect of insurance called underinsurance. The series of advertisements talk about KILB which is “Kam Insurance Lene Ki Bimari”. This series of advertisements focus on the fact how people buy an insurance cover with a nominal sum insured and do not put a thought into it while buying a policy.

Though more and more people have become aware of the importance of insurance, it has been seen that most of them do not have the knowledge and as a result buy life insurance policies which do not provide proper coverage. This step consequentially puts the financial future of their loved ones at stake. Taking insurance is essential but being underinsured is as good as having no insurance.


By underinsurance, we imply that the life insurance taken by the policy holder is not sufficient to financially secure the future of the family. In the present times, the cost of living has increased by leaps and bounds and having an insurance for a couple of lakhs is not sufficient. Following are some of the reasons why people in our country or rather in many parts of the world underinsured:

  • Insurance policies are usually bought to avail tax exemptions and are not seen as an instrument that will help in the times of an emergency. The policy that is bought by the insured is dependent on the premium payable rather than the coverage.
  • In India, still, most of the policies are sold by agents who are more concerned about their commission rather than selling a good product to their clients. They try to sell expensive policies and not help the client decide an important coverage.
  • There are different products available in the market which provide insurance. Lack or incomplete knowledge results in the wrong choice of policy which affect the premium and can cause discontinuation of the policy.

Disadvantages of Underinsurance

When an individual buys an insurance policy, they feel they have secured the future of the policy and stop focusing on more savings. If the policy does not provide adequate coverage and there are not enough savings, it will be bad situation for the family in times of an emergency. The realization of being underinsured comes to surface when there has been a mishap and at that time there is not much which can be done. With less money coming in from the insurance company, managing all expenses and debts becomes a big issue.

Life Insurance customer support

Underinsured-What Next?

When buying an insurance policy or when one realizes they are underinsured, they must calculate the amount of insurance cover needed to meet all expenses and other liabilities in the future. The general rule applied here is to have a sum insured which is equal to 15 times of the annual income of the policy holder. This rule has its own limitations like living standards, liabilities, age etc.

When the insured realizes, they are under insured, they must look at buying a policy which has an adequate sum insured and which will meet all their expenses after accounting for inflation. One of the best ways to rectify the fault is to buy a product like term insurance which will help one increase their sum insured.

The whole purpose to buy a life insurance policy is defeated if you are underinsured. Aegon Religare Life Insurance is trying to create this awareness by their advertisements. When one realizes that their insurance cover is not appropriate they should try and find the best solution to increase their sum insured and coverage. Aegon Religare Life Insurance Company provides many term and other life insurance plans which provide an appropriate life insurance cover which can take care of all the needs of the family in times of an emergency. The company has a strong customer support and staff which readily helps to decide the right amount of sum insured. All people must take into account the future needs and buy a policy as Aegon Religare rightly says, that being underinsured as good as not being insured.

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