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Women should not shy away from buying insurance

LADIES FIRST: If you are the sole earning member, children and parents are dependent on you

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Indian women have come a long way over the past decade. The proverbial glass ceiling has been breached, and the intricacies of work-life balance have been fine-tuned to conquer the boardroom, the cockpit of a fighter jet and as the lead to space missions.

Yes, from known to unknown, women in India feel more comfortable wearing their career and life objectives on their sleeves. But surprisingly, gender diversity remains a buzzword when it comes to handling money. The men in their lives – the father, the brother, the husband, and the son – still holds sway when it comes to investment decisions.

Considering that women constitute around 10-20% of total lives covered by the country's life insurers, a lot remains to be done to increase the coverage of women. Realising the need, financial institutions are playing their part with innovative products tailored for the Indian woman. The government too has been taking various measures to make women financially more empowered. The Prime Minister's 'Mahila Awas Yojna' is a case in point – an exemplary effort to make women more independent with lower home loan rates.

So, here's to the woman who would like to look beyond physical assets, such as gold, and fixed income instruments, and adopt a strong base for her wealth-creation efforts.

Insurance as income replacement

With every life event, a woman's needs and preferences change, and each would require different solutions.

The wellbeing of a family is largely predicated on the decisions of the mother. It is important that she ensures that the earning members – be it husband or wife or both – have an adequate amount of term insurance. The plan provides financial security to the family in the case of death of the policyholder.

Moreover, many women are the primary earning members of a family. In addition to their kids, there could also be elderly parents who are dependent on them. The amount of insurance should, therefore, be adequately increased to fund these additional responsibilities. Having said that, it is important to buy an insurance cover of at least 10 times your annual salary.

Insurance for children's future

For a married woman who has children, there is a need to increase the cover with an increase in liabilities. One can buy a child plan, which comes with multiple facilities, including death benefit, waiver of premium and maturity benefit. In most cases, (especially where both partners are earning) it is beneficial to buy a policy in the name of the woman as most policies offer a discount for women.

A single mom has to ensure that in the event of her untimely death, she leaves behind enough money to fund a quality education for her kids. A good child plan or even a term insurance will help ensure that.

Insurance to meet rising health expenses

A health insurance policy with maternity benefits for a newly-married couple is also very beneficial. Due to changing lifestyles more and more women are susceptible to medical conditions, than ever before. So, it is advisable to choose a critical illness plan along with a regular indemnity cover to protect against losses due to critical medical conditions.

The cover is a must for both working and non-working women. Worldwide men report a 25% higher incidence of cancer than women, but in India, more women are diagnosed with cancer (Source: The Lancet Oncology). While there is no way to be immune to cancer, your family's finances certainly can be immune to them. Invest in a good critical illness policy.

Insurance for retirement

In our country, where meaningful social schemes are scarce, the woman needs to build a nest egg for her family's well-being. An annual inflation rate of 7-8% diminishes the purchasing power of the money saved today. A stitch in time saves nine and therefore a good guaranteed endowment bond keeps your money absolutely safe and gives you a guaranteed lump sum on maturity. One can start with as low as Rs 1,000 a month. Insurance plan purchased now will ensure that even after the age of 60, the family of the policyholder will be protected from leading a single-income lifestyle even in the case of mounting medical expenses.

Women are gifted with keen foresight, a quality that can be leveraged to achieve long-term financial goals. If a woman has specific goals in mind, such as buying property or beginning a small business, she can invest in life insurance policies that will mature around the time horizon.

Investment-oriented life insurance policies can offer her the benefits of protection, savings and even give tax benefits. So, planning in advance and investing in the right product will help achieve her financial goals.

The writer is chief marketing & digital officer, DHFL Pramerica Life Insurance

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