Understanding why insurance planning is important is not just about reviewing policies; it’s about protecting your family from life’s uncertainties. For middle-class Indian families with unsecured jobs and limited earnings, effective insurance planning is crucial for safeguarding their future against devastating financial impacts. A lack of proper coverage or misguided decisions can result in devastating consequences.
The experiences of three families highlight the importance of thorough insurance planning and how it can change the course of a family’s life.

Why Insurance Planning is Important for Families Like Ravi and Priya
Ravi and Priya were a young couple from Chhindwara, Madhya Pradesh. Ravi worked as a private tutor, earning ₹18,000–₹19,000 per month, and they managed their household well. As a responsible husband, Ravi had taken a ₹2 lakh health insurance policy, which was sufficient for their small-town life.
Dreaming of better opportunities, they moved to Mumbai, where Ravi started earning ₹30,000 per month as a delivery partner. Life in the metro city brought excitement but also higher costs.
When Priya fell seriously ill and required hospitalization, the medical bill was ₹5 lakh. Their insurance covered only ₹2 lakh, forcing Ravi to borrow ₹3 lakh.
The burden of debt pushed them into selling a part of their ancestral home and postponing their plans to start a family.
If they had take financial planning tips from a financial advisor, proper insurance planning could have been prepared for them to cope up with Mumbai’s higher medical expenses and saved them from this heartbreak.
Rajesh vs. Arvind: The Impact of Effective Insurance Planning
Rajesh and Arvind, both daily wage painters from Jaipur, were in their mid-30s. Earning ₹20,000–₹22,000 per month, they worked hard to support their families. Each had two children studying in private schools—Rajesh’s daughters, Meera (Class 6) and Kavya (Class 4), and Arvind’s sons, Rohan (Class 7) and Aryan (Class 5). Their wives, Sunita and Rekha, devoted themselves to managing their households and ensuring their children received a good education.
Tragically, both men lost their lives in the same bus accident while commuting to work. Yet, their families faced starkly different futures due to the difference in their insurance planning.
Rajesh: Securing His Family with Proper Insurance Planning
With the help of a financial planner, Rajesh conducted a proper insurance planning and chose a ₹25 lakh term insurance policy with an annual premium of ₹9,000. This decision ensured his family’s financial stability even after his untimely death. His wife Sunita invested ₹20 lakh in a secure scheme, earning ₹20,000 monthly, which allowed her to continue their daughters’ education, pay rent, and plan for the future without stress.
Proper insurance planning ensured Sunita and her daughters could continue their lives with dignity and financial stability.
Arvind: The Cost of Neglecting Insurance Planning
Without proper guidance, Arvind chose an insurance-cum-investment policy worth just ₹3 lakh, despite paying a higher annual premium of ₹15,000 because it promised maturity benefits. After his passing, the insufficient payout forced his wife Rekha to withdraw their sons from private school, move to a smaller house, and take up a low-paying job.
The lack of proper insurance planning left his family struggling to meet their basic needs.
Understanding Why Insurance Planning is Important for Middle-Class Families
For middle-class families, especially those with unsecured jobs and limited incomes, insurance planning is not a luxury—it’s a necessity. The stories of Ravi, Rajesh, and Arvind show the stark contrast between those who planned effectively and those who didn’t.
Key Reasons:
• Changing Life Circumstances: Ravi and Priya moved from Chhindwara to Mumbai for better opportunities but failed to update their health insurance, leaving them unprepared for higher medical costs.
• Financial Stability After Tragedy: Rajesh’s proper insurance planning ensured his family’s stability even after his untimely demise, unlike Arvind’s family, who faced hardships due to insufficient coverage.
• Securing Future Liabilities: Families like Rajesh’s could maintain their lifestyle and plan for the future, highlighting the importance of evaluating long-term needs.
Leveraging Insurance Planning for Financial Stability
Insurance panning helps identify gaps, optimize coverage, and protect families from financial shocks. Here’s how to get it right:
Steps to Follow
- Consult a Financial Planner:
o Example: Rajesh worked with a financial advisor to choose a ₹25 lakh term insurance policy that covered his family’s needs at a reasonable cost.
o Why: Advisors help balance premiums and coverage for maximum protection. - Update Policies with Life Changes:
o Example: Ravi and Priya didn’t update their health insurance after moving to Mumbai, leading to a ₹3 lakh shortfall in medical expenses.
o Why: Major changes like relocation or a new job require reviewing policies to address increased expenses. - Choose Coverage Over Returns:
o Example: Arvind prioritized maturity benefits over adequate coverage, leaving his family with just ₹3 lakh after his death.
o Why: Term insurance provides high coverage at lower premiums, focusing on protection rather than returns.
Key Takeaways for Families with Unsecured Jobs
The experiences of Ravi, Rajesh, and Arvind offer important lessons:
• Adequate Coverage is Essential: Ravi’s family suffered because their health insurance didn’t account for Mumbai’s higher costs.
• Seek Expert Guidance: Rajesh’s collaboration with a financial planner ensured his family’s stability, while Arvind’s lack of guidance left his family struggling.
• Plan for Long-Term Needs: Insurance should account for future liabilities like children’s education or medical emergencies.
• Avoid Overlooking Updates: Regularly reassess insurance policies to align with your family’s evolving needs.
Choosing the Right Professional for Insurance Planning
When it comes to insurance planning, selecting the right professional can make a significant difference. Here’s why a reliable financial advisor is often a better choice than an insurance agent or broker:
- Unbiased Advice: Financial advisors are legally obligated to act in your best interest, offering unbiased guidance free from the influence of commissions.
- Customized Planning: Unlike agents or brokers, who may push products that yield higher commissions, financial advisors focus on strategies that best meet your financial goals and circumstances.
- Long-term Strategy: Financial advisors assist in creating a comprehensive plan that considers your future needs, not just immediate returns.
For a detailed understanding of how to choose a trustworthy professional, explore our guide on how to find a reliable financial advisor. This article offers essential tips and criteria to ensure you’re making an informed choice, setting a solid foundation for your family’s financial security.
Final Conclusion
Insurance planning is a lifeline for middle-class families, ensuring protection from life’s uncertainties and tragedies. Ravi and Priya’s struggle highlights the consequences of not updating policies, while Rajesh’s example shows how proper planning provides financial security and dignity. On the other hand, Arvind’s family demonstrates the dangers of prioritizing maturity benefits over sufficient coverage.
By conducting thorough insurance planning and seeking expert advice, families can safeguard their future, ensuring stability and peace of mind even during life’s toughest moments.