Feminine Face Of Insurance

Close to 30 per cent of total lives covered by LIC are those of women. Around five years ago, this percentage was as low as 18-19 per cent. The figures have risen after women in metro cities have started working. Even then, in India, insurance coverage of women is on the lower side .There are many reasons put forward to explain why such a gender gap exists - from the fact that many Indian women are home-bound to their relatively low exposure to risks. The main reasons, however, are that financial matters are still decided by male members of the family and Indian society doesn’t recognise the value of a woman. Importance is not given to a woman unless she is earning and therefore, when the question comes up for insurance, it is very difficult to get the decision-maker to sign on the dotted line.

[INSERT_1]

However, recent surveys in the US point otherwise. According to them, the human life value of a non-earning spouse in the US market – a homemaker with children – worked out in the range of between USD 150 to USD 400 per week. While it may not be that high in India yet, the principle is gradually beginning to apply with the emergence of the nuclear family and rising living standards. In fact, experts suggest that women need insurance to a much larger extent as traditionally in Indian society the husband is 3-5 years elder than the wife, the result being that women survive after the husband’s death for an additional 7-9 years. Therefore, during this period they need a regular stream of income to live independently with dignity and confidence.

Also, in India, women outlive men and therefore need a larger retirement kitty. Moreover, women are less likely to receive a pension and accumulate retirement benefits as most of them are not in service. In the case of working women, her basic needs are exactly similar to that of a man and hence the complete range of insurance products applies to her. In fact, life insurance makes sense even for a single working woman, if she has dependants.

The other reasons why insurance is important for women are: a) They are at a higher risk for cancer and hence could look at buying cancer protection, b) On a running policy, additional riders can be purchased at a nominal cost. These add-ons cover specific women’s health like reconstructive surgery benefits due to breast cancer, congenital disability benefit of children, complications of pregnancy benefits etc. Such add-ons can be attached to all unit-linked plans and most traditional products, c) Double-income homes almost invariably build their lifestyles on the combined income value. So, even if the wife earns a smaller amount, losing her and her salary could put the family in a problematic situation and, d) Insurance can help in forced savings for your retirement.

To get started, one way could be to start building a portfolio aggressively when single, in line with your risk [PAGE BREAK]

appetite. At this stage in life one can consider a unit-linked plan with an equity skew since you can afford to take high risks at this stage in life. Once married, one needs to budget for savings as a couple. It is a good idea to continue with the unit-linked wealth creation plan and add a term cover to protect home loan liability. Once children are born, one needs to start thinking much more long-term proposals. One can buy children’s plans on investments and insurance, primarily to secure their future education.

Also, ensure a health cover for you and your family. Experts suggest that a woman should insure herself when single and increase the cover by 25 per cent when getting married and on the birth of a child. This can be done each time without medicals and at practically no extra cost. Experts also suggest that a housewife without income should have life insurance that should be based on the family’s living standard. One possible benchmark is that the value of her insurance should be a third or fourth of her husband’s cover. Some women feel that they have no need for insurance. Others believe they can't afford life insurance on a fixed income. Whatever the reason, women cannot afford to be without life insurance.