Indian Women are making financial decisions to enjoy financial freedom. A life insurance plan is crucial for women to enjoy true financial freedom. The number of Indian women buying life insurance is on the rise. This is what IRDA, the insurance regulator in India had to say on the number of women availing life insurance plans.
IRDA in its annual report stated that women availed 36% of the 28.6 million life insurance policies sold in FY 2018-19. Women had also availed 32% of the life insurance policies in FY 2017-18. Most of the life insurance plans were availed by women from West Bengal, Uttar Pradesh and Maharashtra.
Life insurers are quick to note the shifting tides. They are selling niche life insurance plans for women. These life insurance plans look after specific-life stages of women like marriage and child-birth. Life insurers also want women to sell life insurance plans. Women are better sellers of life insurance plans to women.
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Working women need life insurance. If you (woman) is earning, you need a life insurance plan. Working women must avail a term life insurance plan. This is a pure risk cover. You pay a premium depending on the sum assured. If the policyholder dies within the term of the plan, nominees get the sum assured also called death benefit. This plan offers no survival benefits.
To understand the value of a term life plan, you must first understand what’s human life value or HLV. HLV is basically the expected lifetime earnings of an individual. This is the total income you are expected to earn over the remainder of your working life.
Term life insurance is an excellent way to transfer wealth for young people. A person dying young will not have enough money to transfer to loved ones. With term life plans, a policyholder can transfer a huge corpus to loved ones on death at a young age.
Working women share the responsibility of family finances with a spouse. The family has dependent on parents and children. Life insurance takes care of all these expenses on an untimely demise.
Working women jointly plan finances with a spouse. They bear children’s school fees and other expenses. Enrolling children in vocational courses may be expensive and investments must be made for children’s marriage. The right kind of life insurance plan like a child endowment plan helps put money aside for these expenses.
Women have a higher life expectancy than men and must invest for retirement. This is where life insurers offer annuity plans. The annuity plan ensures regular payout for life after making a lump sum investment. The money paid is invested by the life insurer and the returns are paid to the annuity holder. Some popular annuity plans are immediate annuity plans and deferred annuity plans.
Immediate Annuity Plans: This plan is availed after making a lump sum payment. The annuity payout starts immediately for a limited time period or a lifetime.
Deferred Annuity Plans: These are basically pension plans where payout starts after a certain date. You have the accumulation phase where you invest and accumulate cash to buy the plan. You then have the vesting phase where you enjoy the benefits of the annuity plan. (These are the payouts from the annuity plan).
Life insurance helps women leave a legacy for children. If a parent is not there to take care of the child, the legacy helps. The emotional loss can never be replaced, but the financial burden could be taken care of.
So women out there, try to spend less on gadgets, clothes or shoes. Buy that life insurance plan.
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