Why should insurance be mandatory?

Five Rupee Coin

Photo credit: C Dinesh. This image is published under this creative commons license.

I do understand the importance of insurance. But, shouldn’t the choice of getting/not getting insurance be left to us? Aren’t we knowledgeable enough to decide on it? Why then, is the Govt. making insurance mandatory?

Since it’s mandatory to take two-wheeler insurance, I have taken two-wheeler insurance for the last 9 years (that’s as long as I have been driving). On an average, I have spent around 700 rupees per year and I have spent a total of 6,300 rupees for a vehicle insurance that I have never used till now! For cars, the amount is much higher.

There have been a couple of small accidents, but they were very small and I spent less than a couple of hundred rupees to change the indicator or other things that broke. I can’t be claiming such small amounts and in my case, I wouldn’t have even been qualified to claim insurance.

Even if there is some major accident, I can spend the amount required to repair the bike myself. Why should I depend on some insurance company, which I am sure would put me through a thousand procedures? I am basically at their mercy after paying money regularly to them!

What’s the use of an insurance that I am not going to claim at all? Shouldn’t the choice be left to me?

In fact, taking an insurance is very easy. Just give your credit card details and they’ll do it for you even over the net. All the Terms &Conditions are practically and safely hidden.

One favorite insurance for many is the health insurance which is given by companies to their employees. Employees think that it’s free. No, it’s a part of your CTC. You’re still paying it.

I have never claimed health insurance but I know some people who did. When the hospital knew that it was an ‘insurance case’, they took all kind of tests and inflated the bills. After all, the insurance companies are going to pay it!

Doesn’t this encourage excesses? Already, the resources available to us are limited, and we want to utilize them unnecessarily because of the availability of insurance. Though there might be some guidelines regulating such actions, these things generally go unnoticed.

I’ve heard that in some countries, health insurance is offered for ‘free’ by the Govt. Again, nothing is free, as that amount is already accounted for in the taxes. So once again, we are paying it indirectly.

Shouldn’t these decisions be left to the individuals? Can’t individuals decide on the best health care options available to them, when an eventuality strikes? Will they go to hospitals that charge exorbitant amounts (unnecessarily) if they didn’t have insurance?

Then, there is life insurance. Once I thought that life insurance will become the next major scam after the great fall of the finance companies (in my city). I took life insurance but then discontinued it and then they say that all that money is non-refundable (my plan was like that). But thankfully, it was only a small amount.

I am not saying that insurance is a waste, as it is necessary in certain situations. But shouldn’t the individuals/organizations be allowed to decide on the same according to their individual requirements/risks? Why is the Govt/companies making these things mandatory?

Destination Infinity

I am Rajesh K, the author of this blog. While this blog is my hobby, I am a Freelance Video Editor by Profession. If you want to make Videos for Business or Special Occasions, do visit my other website WOWSUPER.NET to see the portfolio and get in touch.


    • Rajesh K

      Actually, there is a third party insurance that costs much less than the regular insurance. But any companies don’t give that option to us! Obviously, they are taking advantage of a regulation to sell a higher value product that is not going to be used in majority of the cases.

      Destination Infinity

  • Bikram

    I lost about a couple of lakh as I took a life insurance in india when i had gone there , one of my friends was a agent and he made me take it , and later due to some reasons i did not think it to be worth it , but they said the same its non refundable and now the premium is so much that i jsut cant afford to pay it all together to make it live again..

    But Life insurance one must have i would say , It is a good thing to have for sure you never know when you go to god and leave people without any money …

    I think it is a good thing to have


    • Rajesh K

      Since life insurance is not mandatory, it depends on the individuals to take it or not. So, it’s ok. In my case, I was moving from city to city and was not able to continue paying it.

      Destination Infinity

    • Rajesh K

      In some cases, like automobile accidents, I might want to repair my bike by myself. Or, I may want to buy a new bike if the damage is huge. Having an insurance limits my options. Secondly, that money paid to insurance is underutilized (at least in my case). So, shouldn’t I be allowed to decide what insurance to take and what not to take? Why are they mandatory?

      Destination Infinity

  • ruchi jain

    Insurance is necessary for unpredictable world,, but i got a silly question in my mind..
    Who will get the compensation, if earth will gonna die out in dec 2012( a rumor )

    • Rajesh K

      Dec. 21st 2012 is the exact date 🙂 The answer is: Who needs compensation, when no one is there?

      Destination Infinity

  • Jas

    Insurance is meant to be used in bad times… God forbid, if a bad accident happens… Investing in life insurance makes sense because it makes life for the people left behind a little easier… having said that making it mandatory might not be a good solution…

    • Rajesh K

      Making it mandatory is one thing and selling insurance to us without letting us know all the terms and conditions is another thing. I think, if insurance companies start making it easier to claim insurance, it would be much better.

      Destination Infinity

  • A


    In most countries liability insurance on vehicles is mandatory.

    Health insurance is a big issue in the USA. Health care is so expensive here. Every year health insurance premium increase but still health care insurance agencies are making a lot of money…….In my mind Health care should be regulated by state but that is not the case in the USA.

    • Rajesh K

      Health care insurance is a difficult topic to come to a conclusion. I need to research more on that topic to give a firm opinion.

      Destination Infinity

  • Vaish

    Insurance is really important, and Govt should not let it with individual’s hands to should be mandated. But why privatise the sector and let too many companies come into the trade is something beyond my answer. They should be mandated, but be affordable, and easily accessible (to claim) to every citizen of india. Health insurance comes free in every other country except india. Ofcourse they levy them in the general tax, but they are aptly used. You don’t pay for tablets or medicines or for any consultations, unless you choose to go for a private therapy. In India, medeclaims (given by companies) are good, because you can do cashless hospitalisation. It’s just employees are not trained on how to use them, or there’s less knowledge on the processing. I knew of a couple of people who genuinely benefited from this, which otherwise would have been a huge expense for them. Life insurance can be left to individual’s choice..which again, i made a huge mistake of insuring and had to pay 50K every year!! Even if I save that money, I don’t need any life insurance at all!!

    • Rajesh K

      Insurance being affordable and easily accessible is the main issue… Concept wise it’s fine…

      Destination Infinity

    • Haramie

      I can’t believe when people still believe that govt should take care of individuals whe it probably can’t take care of itself. When govt does things….either their will be shortage like electricity, bad service like air India and railways, or it becomes expensive for the govt to do it like bsnl. Another part to it is it……reservations and contracts. Leading to dirty corruption. Govt is a bastard….belongs to society and nobody wants it. Keep it small….for law making.

      Insurance is an individual responsibility. Health care too……you have no right to steal from one tax payer and create 2 unnecessary jobs to make sure they pay for another person. Eventually those two fellows will take bribes and the guys who are supposed to have insurance won’t have it. Leave the business transanctions to people because they can own people’s problems …..a business gets paid to take care of services…..and they know to retain customers. In a free market you will have more businesses, hence competition and lower pricing and better service.

      Rajesh…I will start my blog soon….ur an inspiration.

  • Haramie

    Unfortunately people in power think they know what is good for people and end up doing what is good for them.

    In a free market….what u said is right and it would also decrease cost of insurance.

    • Rajesh K

      Our people seem to think that electing people to power is their only responsibility and everything else will sort out on it own. No wonder they are taken advantage of!

      Destination Infinity

  • Reema

    I think health insurance and life insurance are good things and should be mandatory because if people are left on their own, many will just blow up the money or tap into savings for health etc expenses.

    • Rajesh K

      What about people who will not blow up their money and want to make their own plans for health/life related emergencies?

      Destination Infinity

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