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Importance of Life Insurance in Women's Lives

Know all about Importance of Life Insurance in Women's Lives

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The world we live in is changing constantly. The society has gone through substantial transformations in the past few decades. To be specific, women are becoming more in charge of their lives now. It is a gradual shift in the gender roles in the society that has given way to change in several other fields.

The importance of life insurance for women has become more apparent in recent years. For a long time in the past, it was the husband or the father's responsibility to take care of their family members' financial needs. With time, women have acknowledged the importance of life insurance for themselves and invested in it.  

Need for Life Insurance for Women 

Life insurance is a crucial plan of any individual's financial plan, be it a man or a woman. If you are earning and other people depend on you for monetary needs, it is wise to invest in a life insurance policy. However, the importance of life insurance for women has many distinct reasons only specific to them.  

The role of a breadwinner in a household is no longer confined to a specific gender. Women in India have been a critical element in managing household finances before as well. It is now that they are catering to a different set of financial needs for themselves as well.

· According to the last Census of India, 48.5% of the population is female. There has also been a considerable increase in the workforce participation of women. These are all factors that point out the importance of life insurance for women.

· There is a need for a sound financial plan to help women recognize their short and long-term needs. Since India's culture has conventionally made financial planning a gender role, we must focus on making women realize the importance of life insurance. 

 

· Insurance policies are in place to help people create a financial cushion for their loved ones. It is instrumental in preparing for unforeseen circumstances. Women have always taken up the central role of a caretaker in the family. When they are responsible for financial needs, it is of utmost priority to strengthen the contingency plans.

The importance of life insurance for women is not different from men but equally crucial for their family's well-being. 

Benefits of Buying Life Insurance as Women Policyholders 

As mentioned earlier, the importance of life insurance for women is one that must not be ignored. With the continually developing society framework, there is a need to protect their financial assets better and devise a personalized financial plan to a woman's requirements.

Here are some of the reasons that highlight the need and importance of life insurance for women:

1. Covers Life Risk 

Life insurance policies offer a way to plan for future expenses in the present. While many things are not in our control in life, we can prepare for hardships. The importance of life insurance for women lies in creating a much needed financial cover for their family.

Most insurance providers offer certain additional benefits of lower or discounted premium rates for women. It is essential to understand why insurance is important for women to meet the milestone expenditures in the future, such as children's education, marriage, etc.

2. Smart Savings 

In India, small scale savings have been an area of expertise with women. Most women in rural and urban households are continually analyzing and planning their expenses to optimize their savings.  With the help of different life insurance plans, they can maximize the returns on their investments radically.

The importance of life insurance for women is not limited to providing for their families in a time of need. They can invest in plans such as ULIP to acquire higher returns depending on their risk appetite. Buying life insurance plans after knowing why insurance is important for women opens up several possibilities for them and their family's expenses. 

3. Financial Independence

It is always favourable to be in charge of your finances. It gives you a sense of confidence and reassurance as you do not have to rely on anyone else. It is a substantial factor for women when understanding the importance of life insurance.

It ensures that your family remains financially independent, even when you are not around. It will allow you to live without worries over future circumstances and ensure that they don't have to compromise on their goals in difficult times.

Moreover, it will help in allotting portions of your income towards short-term and long-term expenses as well.  

3. Financial Independence

It is always favourable to be in charge of your finances. It gives you a sense of confidence and reassurance as you do not have to rely on anyone else. It is a substantial factor for women when understanding the importance of life insurance.

It ensures that your family remains financially independent, even when you are not around. It will allow you to live without worries over future circumstances and ensure that they don't have to compromise on their goals in difficult times.

Moreover, it will help in allotting portions of your income towards short-term and long-term expenses as well.

 

4. Premium Amount 

Insurance providers are cautious about assessing the risk profile of the policyholder. It is done to accurately understand the insured's possible requirements and customize their plan to provide that in the best possible way.

To put it simply, a higher risk profile usually means a higher premium amount since the possibility of claims is higher as well.

In general, women are considered to have a lower risk profile than men. Therefore, the importance of life insurance for women becomes even more attractive in terms of lower premium rates.

5. Tax Benefits 

Every earning individual looks for ways to reduce their expenditure and enhance their savings. Life insurance policies allow men and women to save on the premiums to secure a financial cushion for their loved ones. India's government has made it possible for the people to save on tax on the maturity benefit of some plans as well. 

Types of life Insurance Plans to Choose From

Now that we have understood the importance of life insurance for women in detail, you must know which insurance plan is well-suited to your needs. It is essential to evaluate the coverage you may require to maximize the benefits of life insurance for women.

One of the points contributing to the importance of life insurance is that various plans can take care of different financial needs.

Let's take a look at the significant types of insurance plans available.

Types of life Insurance Plans to Choose From

Now that we have understood the importance of life insurance for women in detail, you must know which insurance plan is well-suited to your needs. It is essential to evaluate the coverage you may require to maximize the benefits of life insurance for women.

One of the points contributing to the importance of life insurance is that various plans can take care of different financial needs.

Let's take a look at the significant types of insurance plans available.

 

1. Term Insurance Plans 

One of the most sought after life insurance plans in India is a term plan. It allows the policyholder to insure themselves for a specific period of 10,20,30 or more years, depending on their requirements.

It is a comparatively cheaper insurance plan since it does not offer maturity benefits. However, there are Term Insurance Plans with Return of Premium (TROP) available in the market as well.

 

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2. Endowment Plans 

Endowment plans offer a combination of investment and savings by allowing the policyholder to save money regularly over a period. It is helpful to achieve long-term financial goals in life.

3. Unit Linked Insurance Plan (ULIPs) 

ULIPs are suitable for policyholders with a larger appetite for risks. These plans allow us to invest in equity funds and help in taking market linked returns, depending on the market's performance. It is an additional benefit over the life coverage.

Also Read: What is ULIP?

4. Retirement Plan 

The importance of life insurance for women is also significant because it allows them to plan for their retirement. There are retirement plans available that will help create wealth and ensure financial security for self and family.

Frequently Asked Questions (FAQs)

Q. When Should I Get Life Insurance? 

A. The importance of life insurance may vary depending on your life stage. For example, an ideal time to buy life insurance would be when you start earning.

Q. How Much Life Insurance Do I Need? 

A. Every person has a different financial profile affected by various factors such as age, gender, income, habits, liabilities, and more. Hence, it is essential to carefully assess your own needs to calculate your family's adequate coverage. Keep in mind the major future expenses and the rate of inflation as well.

Q. Who Can I Designate a Beneficiary? 

A. It is up to the policyholder who they want to designate as their beneficiary. You can choose a family member, multiple people, a charity, a trustee, or your estate listed as your beneficiary.

Q. Is It Expensive to Purchase Life Insurance? 

A. Insurance providers offer a range of insurance plans that allow you to spend within your budget. There are options on the frequency of premium payment, such as monthly, quarterly, bi-annually, or annually. Thus, you get a lot of options to choose from based on your income.

Q. Can I Add Riders to My Life Insurance Plan? 

A. Yes, riders in insurance are add-ons that can enhance the benefits of your life insurance plan. It is helpful to recognize your needs and opt for riders that can ensure well-rounded financial security.

ARN: Jan21/Bg/13C