Understanding the Unique Insurance Needs of Women

Women today hold significant financial power as equal participants in the workforce or even as breadwinners of their families. Insurance can act as an excellent economic empowerment tool to ensure their financial freedom. Women are increasingly realising the benefits of life insurance, evident from the fact that the share of women’s life insurance policies sold by private companies rose to 30.13% of the total policies in 2022-23, compared to 29% in 2021-22.

With numerous women-specific life insurance products available in India, there are ample choices to find the best-suited plan for one’s needs. Whether it be paying for higher education, planning your wedding, protecting your assets, or build a retirement corpus, insurance plans can be a significant addition to your financial portfolio. Life insurance is also the need of the hour since women are at a higher risk of some chronic health issues like hypertension, arthritis, and osteoporosis. Read on to understand the unique needs of women and how life insurance can help them.

Life Insurance for Women in India
Life insurance acts as an investment tool to achieve financial stability. Single mothers can especially benefit from insurance as it financially protects their children and dependants in their absence. Liabilities like home loans and personal loans can also be taken care of.  Certain life insurance policies even offer a regular stream of income to fulfil goals or cover living expenses. Besides your regular job, you can use the insurance payouts to fund your aspirations or start a side business.

Life insurance is beneficial for business owners too. Female entrepreneurship is rising in India. About 20.37% of the MSME industry comprises of women-led firms. Insurance cover can be used to safeguard your business in your absence. The cover provided by insurance will help your family pay off existing liabilities and avoiding a financial setback. Income payments received via your insurance plan can also be of great help in case you lose your jobs.

Insurance policies play a pivotal role in tax planning in India. You are eligible for tax deductions of up to ₹1.5 lakhs on your taxable income under Section 80C of the Income Tax Act for the premiums paid towards insurance.  However, the cumulative premium will be taxed as per the prevailing tax slab if it exceeds ₹5 lakhs. This rule has been set by the Union Budget 2023. Below this level, the sum assured will be completely tax-free. In short, women can maximise their tax benefits by using life insurance wisely.

Recognising the Unique Insurance Needs of Women
The top insurance companies in India understand the specific behavioural patterns and preferences of female customers. This helps them create policies that are tailored made to benefit women. Men and women are biologically different and so are their health needs. For instance, women have a lower mortality rate than men. This gender disparity leads to life insurance products being priced differently. Longer life expectancy brings down the premium. This is because insurance companies function on a risk-based pricing model.

Certain term plans are also designed to be more affordable for women. Studies have found that the average premium is at least 15% lower for women. This is mainly because Indian women have a 2.5% higher life expectancy than men. Low-priced term insurance is especially helpful for young women who have just started working. Term plans are also less complicated and offer systematic payouts for a fixed period, which makes them a convenient option.

Critical illness is also covered under some types of life insurance for women. Certain policies offer 100% sum assured on the diagnosis of vaginal cancer, uterine/cervical cancer, breast cancer, burns, multi trauma, fallopian tube cancer, and ovarian cancer etc. 

If you are a woman who is not earning, don’t think that you are not eligible for life insurance! Even homemakers need to be financially secure to compensate for the rising lifestyle expenses in India.

How to Pick Life Insurance for Women?
Keep the following in mind while choosing the best policy for your needs:

• The earlier you begin, the better it is, since you are less susceptible to diseases and thus the premiums are lower.
• Consider a ULIP if you are looking for both investment and insurance.
• Add riders to the base plan to strengthen the insurance cover.
• Analyse your income, present lifestyle, existing debts, and your dependants.
• Read the terms and conditions, clauses, and claim settlement ratio to make an informed choice.

Whether you are a working woman, business owner, spouse, or parent, consider buying a life insurance plan to financially safeguard your loved ones against unforeseen circumstances.

Aastha Mestry - Portfolio Manager 

An Author and a Full-Time Portfolio Manager, Aastha has 6 years of experience working in the Insurance Industry with businesses globally. With a profound interest in traveling, Aastha also loves to blog in her free time.