Insurance is one of the few financial products that offers protection when things go awry. Ironically, it is also the most postponed purchase in many people’s lives. Individuals quickly buy phones, vacations, gadgets, and subscriptions — but insurance? “Maybe next year.”
This procrastination can become expensive when life presents a medical emergency, accident, or unforeseen tragedy. Let’s delve into the reasons people shy away from insurance and how these choices can have negative repercussions later.
- The “It Won’t Happen to Me” Mentality
In their 20s and 30s, many feel nearly invincible. Illness, hospitalization, death, disability — these are events we tend to believe happen to “other people.”
Psychologists refer to this as optimism bias — the notion that negative occurrences are less likely to affect us.
The truth is quite different:
Medical emergencies don’t discriminate by age.
Accidents don’t make appointments.
Diseases don’t provide advance warnings.
When something does occur, families often find themselves borrowing money, selling possessions, or depleting their savings.
- Insurance Seems Like a Cost Rather Than a Safety Net
When someone spends ₹30,000 on a phone, they receive the phone right away.
When they invest ₹10,000 in insurance, they get “nothing.” No immediate gratification. No rush of excitement.
Insurance falls into the category of invisible benefits — its value is only recognized during a crisis.
However, when that crisis strikes, the contrast between being insured and uninsured is significant:
With insurance → financial shock is managed.
Without insurance → financial shock turns into a catastrophe.
- Insufficient Awareness & Financial Literacy
Most educational institutions fail to teach:
What insurance is.
Why it is necessary.
Which types are crucial.
How to select a policy.
What riders or exclusions entail.
As a result, individuals step into adulthood without financial knowledge. Insurance becomes perplexing and daunting, leading them to disregard it.
- Mis-selling & Bad Experiences Ruined Trust
Many individuals were sold ULIPs, endowment plans, or perplexing traditional plans under the guise of “investment + insurance.”
What was the outcome?
Incorrect products
Minimal returns
Mismatch with requirements
A lingering bad taste and skepticism
Following this experience, many people conclude that all insurance is detrimental, when in fact, term and health insurance hold significant value.
- Procrastination: The Silent Killer
Everyone intends to purchase insurance at a later date:
“Once I secure a job”
“Once I get married”
“Once I earn more money”
“Once I reach 30”
However, life doesn’t adhere to your timeline. Emergencies don’t pause for “better income” or “perfect timing.”
Moreover, postponing insurance makes it pricier:
Premiums increase with age
Health complications lead to more rejections
Waiting periods extend
- Belief That Employer Insurance Is Enough
Many people depend on their employer’s group health insurance. While it is beneficial, it has its drawbacks:
❌ The sum insured is often low (₹2–5 lakh)
❌ Coverage ceases when you leave the job
❌ Lack of control over policy conditions
❌ No portability
A single medical emergency today can easily cost ₹7–15 lakh in metropolitan hospitals. Employer coverage is a support system, not a substitute.
7. “My Family Will Help” Mentality
This is a cultural one. Many assume family will bail them out financially. But medical emergencies can bankrupt families too.
Hospital bills are ruthless. They don’t care if:
- It’s end of the month
- You have a loan
- Your parents are retired
- Your business is slow
Insurance prevents a financial shock from becoming a generational burden.
8. Rising Medical Costs Are Underestimated
Healthcare inflation in India is rising faster than normal inflation. A surgery that cost ₹1 lakh a few years ago now costs ₹3–5 lakh.
When uninsured people face medical emergencies, they end up:
- Liquidating savings
- Stopping investments
- Taking personal loans
- Selling assets
- Using credit cards at 36–42% interest
Insurance exists to prevent exactly this outcome.
The Pain Arrives Later — When It’s Too Late
Avoiding insurance feels harmless until something happens. Then it becomes a story of:
- Stress
- Debt
- Family pressure
- Financial setbacks
- Delayed goals
Many people buy insurance only after a bad experience — but by then, premiums are higher or health issues become exclusions.
So, when is the right time to purchase insurance?
The straightforward answer:
As soon as you can — before unexpected events occur.
In order of importance:
Health Insurance
Term Life Insurance (if someone relies on your income)
Critical Illness coverage (optional, yet impactful)
Final Reflections
Insurance isn’t just about death, hospitals, or anxiety. It’s about safeguarding your aspirations, dignity, and financial security.
The ideal moment to acquire insurance is not when you find yourself in need — it’s before that need arises.
