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Term Insurance Plans Can Safeguard Your Family's Future

Updated on August 3, 2016

Rising Income

India's economic and financial growth can be estimated from the rising income of employees working in the country. According to a report by leading global advisory, broking and solutions company, Willis Towers Watson, the salary increase of 10.8% in 2015 for Indian employees is the highest among all APAC nations. All other APAC countries registered an increase in the single digits, with Malaysia at 9.5%, China at 8.6%, Philippines at 6.7%, Australia at 3.5%, Japan at 2.5% and so on. The salary and appraisal on an employee is in direct reference to the company's health and outlook for the future. This in turn represents the country's financial stability and better developmental approach. Reasons for this generosity in salary from employers include the comparatively decreasing inflation rates in the country and the strength the Indian Rupee is gaining in the international markets.

In 2016, the salary appraisal rate was predicted to be pretty similar to that in 2015, with minor fluctuations, considering the slight market inflation levels, says Sambhav Rakyan, Data Services Practice Leader, Asia Pacific at Willis Towers Watson. Major sectors that benefited the most from this appraisal rate were startups who top the chart, followed by life sciences, entertainment media and consumer products.

Rising Consumerism

According to recent statistics, in 2015, India was estimated to have anywhere between 250 and 300 million individuals in the socio-economic landscape called the middle-class. India's middle class was believed to be around 20% of the country's total population in 2015, according to an article in the Maps of India. Another study by the international consulting firm, McKinsey and Company, says that India will become the fifth-largest consumer market in the world by 2025 considering the country's growth path.

Reasons for the Rise

The reason for this rise in consumerism is the increasing household income, which is predicted to triple itself by 2025 from what it was in 2005. With this rise more number of people living below poverty line are believed to garner a more stable and secure life. It is estimated that the middle class population will swell up to 10 times in 2025 to reach 583 million from the 50 million in 2005. This means an increase in the purchasing ability of the middle class giving rise to consumerism. Looking at the percentage of annual increase in salary and with the rising number of people it won't be a farfetched idea to believe that India might become a much larger consumer market than predicted. In fact, the MacKinsey Global Institute predicts that the country would be the fifth largest consumer market by 2025. More and more players are entering the Indian markets looking at this potential. The current FDI policies have also provided the necessary boost for these new entrants, promoting consumerism and thereby maintaining a steady cash flow in the markets of India.

Safe Investment Options

Considering the rise in income and the rise in expenditure because of consumerism, it will be advisable to safeguard your personal as well as your family’s future. Most of the Indian middle class is family oriented and consider their family’s welfare as a matter of primary concern. It is better to start thinking about it early in your career and invest in a reliable term insurance plan, say experts. These term policies are investments that will safeguard your family from unexpected events. It will also give you peace of mind that all your loans and liabilities will automatically be taken care of in case of any eventuality and will not become a liability for your family. Starting early will give the maximum benefit at the end of the term and the premium amounts also will not become a burden to the active consumer in you. Also, the tax benefits associated with these term insurance plans will leave you with a little extra, making sure you are not sacrificing on any luxuries of a beautiful life.

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