Expert Take - Types of Life Insurance Plans for Working Women

Expert Take - Types of Life Insurance Plans for Working Women

You've got a nice job, you've put some money aside, and you're working hard to fulfil your goals as a wise and intelligent young lady. Now is the time to protect your financial future as well as that of your loved ones by purchasing insurance. If you are pondering over the question of whether you really require insurance, then the answer is an unequivocal Yes! There are numerous compelling reasons why you should consider various types of life insurance. Let's look at the four forms of insurance that every wise woman should have and why they're important :

Why is it necessary for women to purchase life insurance?

The fact that a working woman contributes to her family's income is the most crucial reason for her to buy life insurance. Of course, when you look at a century back, the contributions of women to the household were not considered important or valuable enough to ensure, however, this ideology has changed for the better.

Today, a woman's salary provides for her family in the same way that a man's salary does, if not more. As a woman, you can now quantify your contribution to the household and help your family maintain their existing standard of living.

Therefore, the reason you need to consider different types of life insurance is to ensure that your family has enough income to keep them afloat if something unfortunate happens to you, such as a long-term disability, an accident, or premature death.

If you're a single working woman, life insurance is only necessary if you're caring for elderly parents or other dependents like a younger sibling or sister. In 2019-20, the life insurance market earned 5.73 lakh crore in premium income, up from 5.08 lakh crore the previous year.

What type of insurance should women purchase?

  • One of the first types of life insurance you should make is health insurance. It would be naive to suppose that you will not require health insurance because you are young and healthy. The sooner you buy health insurance; the lower your premiums will be. Hospitalization, medical expenses, post-care, doctors' fees, medical crises, surgery, critical illness, maternity expenses, and more are all covered. If you are in your 20s, a yearly investment of less than Rs 10,000 can give health insurance coverage of around Rs 25 lakh. This is a little price to pay for the peace of mind and comprehensive coverage that a health insurance policy gives.
  • Endowment life insurance, often known as ULIP, is a type of life insurance that pays out a set amount. Life insurance is rarely considered by young people because death seems a distance away, and leaving a legacy is not a priority. Purchasing a life insurance coverage that also serves as an investing tool is a wise decision.
  • An endowment life insurance policy is ideal for achieving this goal. It works by taking a portion of your premium and using it to provide life insurance, while the remainder is invested by the insurance company. You have a better chance of outliving the insurance term if you start early. When the term is up, you'll receive a lump sum payment as maturity benefits.
  • Periodic bonuses are also available with endowment programs. You can put this money towards a down payment on a house, a car, travel, or reinvest it to secure your financial future. ULIPs (Unit Linked Insurance Plans) are an excellent way to begin a long-term investment. They provide life insurance as well as equity exposure with a lock-in period that assures your money has adequate time to grow. At the same time, it's a fantastic tax-cutting tool to have in your toolbox.
  • If you own a car or a two-wheeler, you must purchase motor insurance. It is not only required in India, but it also protects you from unpleasant scenarios. Automobile repairs can be costly. Even if you are the safest driver you know, accidents do happen, and your car could be damaged as a result of someone else's negligence. Your car's repairs will be covered by your insurance, so you won't have to pay for them out of your pocket. If an accident were to happen, it reduced your culpability towards any injury caused to another person or to any physical property.
  • Accidental damages to oneself or others are covered by comprehensive auto insurance. You may make your policy even better by adding riders that cover things like medical bills, extras, and zero depreciation.
  • If you own a home or rent an apartment, every wise woman should get home insurance or renter's insurance. The majority of people believe that rental insurance is unnecessary because their landlord's insurance covers them. This is not the case; the landlord's insurance protects them solely. To protect yourself against loss of personal items due to damage or theft, you must get separate rental insurance. It also protects you from liability in the event that someone is injured on your property. A homeowner's insurance policy, likewise, protects against damage, theft, accidents, and natural disasters. It also provides coverage for temporary living expenses and protects you from third-party responsibilities. Whether you are single, married, have children, or are dependent parents, you need insurance to protect yourself and your loved ones from unfavourable situations.
  • According to studies, health insurance is not a high priority for women in India, with just about 22% of women willingly enrolling for coverage. This is something that needs to be handled on several levels. To close this gap, many types of life insurance companies are now offering women-specific critical illness plans that cover important illnesses that women are more susceptible to.

Is it necessary to have a retirement plan?

Investing for your retirement may not be the most thrilling investment you can make, but it will be the most rewarding in the end. The sooner you get started, the more money you'll be able to put to work for you. Making your retirement plan a priority, regardless of your age or life situation, is one of the best presents you can offer your future self.

What are the reasons to buy term insurance?

  • Online affordability (the most cost-effective kind of life insurance) – Online term plans are significantly less expensive than other types of life insurance. You can purchase term insurance from the internet business right away, with no hassles.
  • Easy access (purchase from any location) - Buying a term plan online is more convenient than buying one in person. In fact, you can get to it from anywhere at any time. All you have to do is go to the website and check the status of your policy from the comfort of your own home.
  • Custom-made (add benefits, adjust policy term, etc.) – You may get a custom-made plan in only a few clicks using an online platform. You can do everything you want with your policy, from adding benefits to modifying the term.
  • Eco-friendly (paperless, 100% online process) — Term insurance is purchased online using a paperless, 100% online method. It cuts down on paperwork and processing costs right away. You won't have to worry about transferring and submitting paperwork to the company's headquarters. Everything can be completed fast and easily via the internet.

What amount of term insurance does a mother or wife require?

The need for term insurance for a mother or wife is established by her financial status. Calculate your premium using the Bharti AXA calculator. When evaluating how much term insurance coverage you'll need, keep the following factors in mind :

  • Current annual income - Your current annual income determines the amount of term insurance you require. If you earn more than Rs. 4 lakhs each year, for example, you should choose a term plan with a cover of Rs. 1 crore.
  • Financial objectives - Your financial objectives, such as your children's marriage, schooling, and so on, play an essential influence in determining your coverage for different types of life insurance.
  • Age at the time of policy purchase - The amount of term insurance obtained is heavily influenced by the age at the time of policy acquisition. Since, we have various needs at different stages of life; age must be taken into account when acquiring term insurance.
  • Financial liabilities – Another factor to consider when determining the level of coverage is financial liabilities. Always ensure that the coverage is adequate to cover all of your financial obligations, such as debts, outstanding loans, and so on.

What is the Perfect Policy Term?

The amount of time specified in the policy is referred to as the policy term. If a policyholder dies before that time and the policy is still active, the insurance company will pay death benefits. Most insurance firms provide types of life insurance with terms ranging differently.

How and why are women's premiums lower?

Women have been observed to live for significantly longer periods of time than men. Hence, women’s premiums are lower than that of men. A person's premium payment period will be longer if they live for a longer period of time. Hence, insurance firms deduct premium charges for women who purchase life insurance plans, making the premium amount more affordable for them. Moreover, health has a significant influence in determining the premium amount. Women, in comparison to men, have a far healthier lifestyle. Some ailments, such as heart attack, are more common in men than in women in their 40s and 50s, implying that women are less prone to illnesses and mortality. As a result, premium rates are lower for women.

Disclaimer:

*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.

Suggested Plans

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