The insurance market in India is showing clear signs of expansion, requiring insurers to be innovative in their approach. Insurance as a financial product occupies an important place in today’s complex financial world. This is so because the risk, which can be insured, has increased dramatically in almost all areas of our lives. This has naturally led to the overall growth of the insurance industry as well as the evolution of a variety of insurance coverages. In India, the overall market size of the insurance industry is expected to be around US$280 billion in 2020.
With such a huge market potential, we can believe that it is due to the high density of penetration in the country. However, insurance penetration in India was pegged at 4.2% in FY21, with life insurance penetration at 3.2% and non-life insurance penetration at 1 %. Another striking statistic provided by IRDAI’s annual report for FY20 showed that the number of life plans purchased by women during the FY fell by 11.76% on an annual basis. Women contributed 34% of the first-year bonus in fiscal 2020, up from 37% the previous year. Moreover, almost a third of policies purchased by women came from just three states – Maharashtra (11.98%), Uttar Pradesh (9.87%) and West Bengal (10.60%).
This then begs the question: why are women so slow to be part of such a crucial financial product?
The answer is not so simple. A key aspect that emerges is women’s lack of awareness of life insurance as a financial product and its benefits. In this article, we try to address precisely that – the things women need to know when buying a life insurance policy.
A wind of change
Insurance policies are designed to help people have a financial cushion for their loved ones and to prepare for emergencies. Women have always played the role of head of household in any family. Moreover, in recent years, we have witnessed a gradual change in society, with women taking an important part in contributing to the growth of the household. While they’ve been a crucial part of managing household finances for years, they now have to meet a whole different set of financial goals for themselves.
It’s great to be a woman
One of the most important benefits of life insurance for women is that it is cheaper for them. According to several research studies, women tend to outlive men and hence life insurance premiums are considerably lower for them than for men. It is often advised that buying term life insurance is a more affordable way to get more coverage. Additionally, buying a policy at a young age will further reduce costs as premiums increase with age.
Contribute to family income
Traditionally, small economies have been the main domain of Indian women. However, with insurance products such as unit-linked insurance plans or ULIPs, they can save and generate better returns and contribute to family income while being secure. Additionally, as more women enter the workforce and become self-employed earners, they need to protect their income. Life insurance can offer a promising avenue as a savings mechanism to build their financial independence and long-term saving habit.
You are not a breadwinner? They can still be financially independent
What is more important is that life insurance is not only essential for working women but also for single women, housewives, single mothers (divorced or widowed) to help them achieve life. financial independence at different stages of their lives. A life insurance payout can go a long way toward covering these costs and providing a financial safety net for their families.
It helps during pregnancy
It’s a common myth that pregnant women are not eligible for life insurance. They need to contact the right insurer to get full coverage for their pregnancy. Although it is always advisable to have a life insurance plan before pregnancy, it can be a mistake to buy it after giving birth. Often women develop certain conditions during pregnancy, such as gestational diabetes or postpartum depression, which make it harder for them to obtain coverage or incur higher premiums.
Create a legacy
Women are often seen as the “money manager” of a family. As we move towards an even more progressive society, their role will only see an ever-increasing evolution. Naturally, creating a legacy should be part of every woman’s thought process. Policies such as whole life plans can be an ideal mode of wealth accumulation for the next generation and ensure that children and grandchildren receive the sum assured in their absence. Single mothers can use the maturity amount as a stable source of income to cover their child’s current and future expenses.
For most women, family security, both physical and financial, is the highest priority. A good insurance product can provide a financial safety net for themselves as well as their family. If they earn, they can also contribute to family income or specific goals through savings-oriented policies. These policies provide an opportunity for long-term wealth creation, healthy returns, and tax advantages, as well as the primary purpose of protection. Likewise, insurance will act as a solid back-up plan to deal with unforeseen circumstances. Having substantial coverage goes a long way in ensuring a quality lifestyle and managing educational and other expenses in the absence of their partners.
Single women can opt for a life insurance plan that helps them secure their savings, income and future investments. Additionally, the policy can provide funds to pay off debts, loans, and taxes, which otherwise would have become a burden on their family members.
Today, having a comprehensive financial plan is required regardless of the member’s income status. As the risks associated with the different stages of our lives continue to increase, the importance of insurance has never been greater. Women need to be exposed to the right insurance product as soon as possible to ensure their financial security and that of their loved ones. Over the years, insurance products have evolved and offered a wide range of coverage and other benefits. Choosing the right coverage depends on a variety of factors such as individual needs, health requirements and financial goals. Buying comprehensive life insurance coverage will therefore be the right step for women empowerment in our country.
The opinions expressed above are those of the author.
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