5 Reasons Why Women Need Life Insurance

No matter whether you earn income or do not earn income, taking life insurance is extremely significant for life safety.

Life insurance is taken to receive benefits in the future through the lumpsum payment of the sum insured on the death of assured to the family. (Representative photo: Getty images)

New Delhi: Are you a married or an unmarried woman? Are you a mother? Single, homemaker or employed? These are the questions that will surround you whenever you plan to buy life insurance. The main objective of enquiring such questions is to get an idea about the kind of coverage you need and to calculate how many financial responsibilities you have in the near future. No matter whether you earn income or do not earn income, taking life insurance is extremely significant for life safety. Before proceeding to know why we need insurance, let’s first understand ‘What Is Life Insurance’. What is life insurance? Life insurance is taken to receive benefits in the future through the lump sum payment of the sum insured on the death of assured to the family. If no death occurs, the assured will receive a maturity benefit i.e. payment of premiums. What else? The assured person also gets the benefit from investment in equity, debt, and other financial instruments(present in some plans). It is a contract between the insurer and the assured where you have to provide some basic information. It helps in creating a wealth of resources/ income for the future to financially assist the dependents in absence. The premiums are paid till the policy attains maturity or life assured meets his/her death. The premiums are calculated based on factors like age of insured, annual income, medical history, personal risk propensity, and occupation. Both men and women are eligible to take life insurance. However, most of the women ignore buying life insurance. If you have the same thinking, then carefully read the points to know how beneficial it is. Why Women Need Life Insurance? So here to get a clear picture of why life insurance is important for women, let’s have a quick glance at the top five reasons behind this-

• Wealth Development for Future: Life insurance policies help women in creating a reserve of income for her family. The income generated is paid in a lump sum to the dependents after the death of the mother. This way you can protect the future of your children even if you are no more.
• Enjoy Tax Benefits: Life insurance is loaded with tax benefits. Any payment of death benefit or any loan is taken against the policy is tax-free. The premium submitted by the assured will receive tax deductions on the annual income tax under section 10, section 80C and 80 CCC of Income Tax Act.
• Security From Unnatural Events: Unnatural events such as death or permanent disability often regarded as a stumbling block in your life. Life insurance supports you and your family by offering complete payment of sum assured on such events. This gradually helps to stand by financial emergencies.
• Retirement Benefits: India is a country where inflation fluctuates every year. So, to ensure you are protected from these risks, the life insurance plan gives monthly pension once you retire. A woman can use this money to meet future expenses. This feature is available in annuity plans or pension plans.
• Lesser Premium Rates: Women often get cheaper premium rates in comparison to the male counterpart. The premium is discounted to entice female participation in buying a life insurance plan. Usually, 10% to 20% of the premium is waived off when a woman takes a policy.

Research Study On Women Involvement In Buying Life Insurance With respect to the research report released by Birla Sun Life Insurance and BSLI- women's contribution towards the family income is much more than men. She not only handles the finances but also handles household chores, child nourishing, and other family responsibilities. The report also focused on the active participation of women in purchasing life insurance policies. About 50% of the women's urban population possess life insurance in contrast to 72% of men population buying life insurance policies. Let’s look at the pie chart displaying the age at which women prefer buying life insurance policies. It is clearly visible from the chart that most of the women population prefer insuring themselves between 20 years to 30 years. Whereas the percentage reduces in the age group which is less than 20 years and above 50 years i.e. 2% & 15%. The research also published an intensive study on the purchase trend adopted by women in buying types of life insurance plans. As per our analysis, we have gathered the data shown in a bar graph. As visible in the column chart, a good percentage of young women showed interest in saving plans. Wealth plans are most preferred by females above 40 years. The reason is increased responsibility like child education, home expenses, etc. Coming to Retirement plans, women above 50 years have shown maximum interest to settle the concern about ensuring future income. However, health and protection receive less attention from women. From this, we can evaluate that women focus on saving money and creating wealth for their family's future needs. Types of Life Insurance Plans Life insurance is a vast term and includes 6 types of plans under it. This include-

• Endowment policy

This policy contains death benefit (in case of death) as well as maturity benefit (in case of survival). The payment of the sum insured is made if any one of the above events occurs early.

• Money Back Policy

These policies serve dual functions of protecting from life uncertainties as well as giving periodic income to accomplish the financial requirements. Women who are not risk-friendly and want to fulfill certain goals, like child education, can opt for this policy. Any female between 7 days to 55 years is eligible to take policy.

• Unit Linked Insurance Plan

Life security and wealth creation are two important aspects of ULIPs. The plan also gives the freedom to withdraw a partial amount. This option is perfect for single mothers who have the responsibility to raise their children. There are many ULIP plans available for women's financial stability like HDFC smart women Plan.

• Whole Life Policy

A long term policy that remains active on submission of the annual or monthly premium for a lifetime or till the maturity. Sum insured is paid either in death circumstances or attaining the maturity age.

• Term Insurance Plan

It is a complete protection plan which involves payment of the sum insured on the demise of the life assured. The payment is surrender to assigned beneficiaries or nominees. It is best for earning women who have lots of responsibilities on their heads.  Term plans are affordable, beneficial and a good source of income for the family after death.

• Pension Plan

A profit-generating plan that gives a lump sum or annuity payments at the end of the policy for the premiums deposited. In India, women quit their job or embrace low-paid employment to feed their children and carry on the expenses. This shows that women have a very little amount and time to save for the future. So, investment in pension plans becomes important no matter if you are married or unmarried or single mothers. Conclusion: Women should not ignore taking life insurance to protect their future life. Plus, they should not think that they aren’t eligible to take the policy because they don’t earn. This perception is entirely wrong. Being a mother, you play a significant role in your family. So, you also need protection from nearby casualties. To choose the best one for yourself it is always advisable to take the help of an online insurance web aggregator that allows you to compare and buy the best one out of all. Make sure you are using an IRDAI approved online insurance web aggregator such as PolicyX.com. This is because IRDAI authentication is important in the insurance industry. Powered by PolicyX.com