Insurance is an excellent tool for handling those unexpected risks in life like accidents, death, onset of a critical disease, natural calamities and many others. While there exists insurance in many forms, the level of awareness among the general public, especially women is not very encouraging. A survey conducted by National Council of Applied Economic Research a few years back revealed that the proportion of male insurance policy holders for all type of insurance is much higher in comparison to female holders, irrespective of an urban or a rural setting. The male female ratio for life insurance policies is 79:21, with the ratio slightly improving when it comes to health insurance.
Women do not mind stepping out of their houses and contributing to their family incomes and taking decisions on their career and other important matters at home, but many disregard their need for insurance. In addition to being an important hedge against risks, insurance would also prove useful as an instrument for securing one’s retirement funds or planning for child’s education in some cases.
Life insurance
The importance of insurance remains the same whether for a male or a female. Life insurance plans are specifically targeted at the earning members of a household. It is intended to replace the loss of income and cover other liabilities of the surviving family members. Many financial planners go by this logic and do not recommend life insurance for homemakers. However, there is another side to this.
There is an economic value to the services rendered by the homemaker at home, though there is no transfer of payment. If, in any untoward circumstance a homemaker is unable to render these services, there is an additional burden on the family in getting these jobs done through someone else. Considering this factor, it is better for women, whether working or at home to get their life insured. Some insurance companies like Aegon Religare Life Insurance offer term insurance policies to spouses of individuals who buy their online term insurance plans. The sum offered is up to Rs 1 crore.
The importance of life insurance goes up, when you have dependents on you, they may be your parents, siblings, children etc. Term insurance (a product where you pay premiums but the money insured is paid back only in case of death) is an ideal product to have in your portfolio. Premiums for these policies are much lesser in comparison to other insurance products that pay back money at certain intervals. When it comes to life insurance there are not many women specific insurance policies. However, if you are looking just for term insurance, any online policy would hold well.
Medical Insurance
While many may still underestimate the need for a life insurance, the importance of medical insurance cannot be undermined. A working lady or the one at home, anyone can fall sick and may be in need of medical care. During these days of rising costs, a normal visit to the doctor sets you back with a bill not less than Rs 500/-, imagine the kind of expenses that you incur for a hospitalisation or treatment of critical illness.
Modern women work hard to keep their personal and professional life successful, which takes a heavy toll on them. Also women are prone to certain gender oriented diseases like breast, cervical, ovarian cancers etc and the risk increases after the age of 40. There are certain health insurance plans that are tailored specifically keeping women in mind like the Tata AIG Wellsurance or the Bajaj Allianz Women Specific Critical Illness Insurance. Women should choose plans that provides coverage on all women related diseases and maternity benefits as well. Do not go in for a plan only because it says it is women specific. It is always better to buy health insurance plans while you are young, as premiums are lesser at this stage.
While you are working, you may have a medical insurance from your employer, but this will end if you are in between jobs, or stop working due any reason. An additional health insurance will make you secure and will not be subject to many conditions that would need to met in a group health insurance cover provided by your employee.
Insurance as a tool for retirement planning
In addition to providing hedge against risks, insurance can also help in retirement planning. There are plans like HDFC Life Smart Woman Unit Linked Insurance Plan (ULIP). This is aimed at women and covers many important events in that could occur during a lifetime, like critical illness (women specific), childbirth/pregnancy complications or death of the spouse. In the event of any conditions occurring, she gets a premium waiver of 3 years yet retaining the cover against her life. This policy is a combination of investment and insurance.
Plans such as Jeevan Bharti I allows riders for critical illness, accident and congenital disability benefit (for a child born) and also allows advance premium payment facility. This policy allows for payment of survival benefit as an annuity. Opting for annuity payments provide for sustained cash flow after a pre determined age. Annuity payments work well for periods after retirement. Even if you were not a working lady, some funds flowing in your sunset years is always better, rather than looking up to your children to provide for your needs.
However, do not forget to evaluate ULIPs before buying, as premiums and other related costs for these plans are on the higher side. Certain financial experts also advise keeping investment and insurance apart.