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Here are some essential tips for building financial stability for women through life insurance

5/13/23 10:54 AM


The insurance market in India is showing clear signs of expansion, asking insurance providers to be innovative in their approach. Insurance as a financial product occupies an important place in our current complex financial world. It has become so because risk, which can be insured, has considerably increased in almost every walk of our lives.


This has naturally led to the overall growth of the insurance sector as well as the evolution of a variety of insurance covers and, as per the Swiss Re Report, India will be the sixth-largest insurance market by 2032.


Given the massive market potential of India, it is plausible to assume that there is significant insurance penetration and density in India, however, that is not the case. A large portion of the population remains untapped for insurance cover in the country.  India’s insurance penetration was pegged at 4.2 percent in FY21, with life insurance penetration at 3.2 percent and non-life insurance penetration at 1 percent.

Insurance density in India increased from $78 in 2020-21 to $91 in 2021-22. Another stark statistic provided by IRDAI annual report for FY21-22 showed that the number of policies issued to women in the year 2021-22 is around 1.01 crore which is 34.7 percent of 2.91 crore total policies as against a share of 33 per cent in 2020-21. The proportion of policies purchased by women compared to the total number of policies sold is greater than the national average of 34.7 percent in 16 States/UTs.


While there has been an increase in life insurance penetration among women, there is still a significant need to further improve the access and uptake of life insurance among women. This then begs the question – why women are lagging in being part of such a crucial financial product?


The answer is not so straightforward. One key aspect that does crop up is the lack of awareness among women about life insurance as a financial product and its benefits. In this article, we try to precisely address that – things women should know while purchasing a life insurance policy. 



Winds of Change

Insurance policies are designed to help people have a financial cushion for their loved ones and prepare for emergencies. Women have always played the role of chief caretaker in any family. Moreover, in recent years, we have witnessed a progressive shift in society, with women taking a substantial lead in contributing to the growth of the household. While they have been a crucial element in managing household finances for years, they now need to cater to a completely different set of financial objectives for themselves. 



It’s Great to be Woman

One of the most significant benefits of life insurance for women is that it is cheaper for them. As per several research studies, women tend to outlive men, and thus, life insurance premiums are considerably lower for them than men. It is often advised that purchasing term life insurance is a more affordable way to get greater coverage. Plus, buying a policy at a young age will help further cost reduction as the premiums go up with advancing age. 



Contributing to Family Income

Conventionally, small savings have been the primary 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 the family income while being secured. Additionally, as more women enter the workforce and become independent earners, they need to protect their income. Life insurance can offer a promising avenue as a savings mechanism to boost their financial independence and habit of long-term savings. 



Not a Breadwinner? They Can Still Be Financially Independent

What’s more important is that life insurance is not only essential for working women but even for single women, homemakers, single mothers (divorced or widowed) to help them achieve financial independence at various stages of their lives. A life insurance payout can go a long way in covering such costs and offering a financial safety net to their families. 



It Helps During Pregnancy

It is a common myth that pregnant women are ineligible for life insurance. They need to approach the right insurance provider to get comprehensive coverage for their pregnancy. While it’s always advisable to have a life insurance plan before pregnancy, it may be a mistake to purchase it after childbirth. Often women develop certain conditions during pregnancy, such as gestational diabetes or postpartum depression, making it harder for them to get coverage or incur higher premiums. 



Creating a Legacy

Women are often considered the “Money Manager” for a family. As we move towards an even more progressive society, their role will only witness an increasing evolution. Naturally, creating a legacy must be a part of the thought process of every woman. Policies such as whole life plans can act as an ideal mode of accumulating wealth for the next generation and ensure that the children and grandchildren receive the sum assured in their absence. Single mothers can use the maturity amount as a source of steady income to cover their child’s existing and future expenses. 


For most women, family’s security, both physical as well as financial, is the biggest priority. A right insurance product can provide a financial security net for themselves as well as their family. In case they are earning, they can also contribute to the family’s income or specific goals through savings-oriented policies. Such policies provide an avenue for long-term wealth creation, healthy returns, and tax benefits along with the primary objective of protection. Similarly, insurance will act as a strong backup plan to tackle unforeseen circumstances. Having a substantial cover 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 secure their savings, income, and further investments. Moreover, the policy can provide funds to pay off debts, loans, and taxes, which otherwise would have become a burden for their family members. 



In Conclusion

Today, having a full-proof financial plan is required independent of the earning status of the member. As the risks associated with different walks of our lives keep increasing, the importance of insurance has never been greater. Women need to be exposed to the right insurance product as early as possible to ensure the financial safety of themselves and their loved ones. Over the years, insurance products have evolved and offered a wide range of cover and other benefits. Choosing the right coverage depends on various factors such as individual requirements, health demands, and financial objectives. Buying comprehensive life insurance cover will thus be the right step in empowering women in our country.


CNBC TV - Anup Seth, Chief Distribution Officer, Edelweiss Tokio Life Insurance 

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