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Longer life, lower premium

Longer life, lower premium

Women should take a life insurance policy at the earliest, especially because their longer life spans ensure that they pay a lesser premium compared with men.

It is essential that the women who have dependants take a life insurance policy whether they are homemakers or breadwinners. It is beneficial for them if they do so at a younger age as the cost of premium is low. In fact, if a woman and a man are of the same age, the former will be required to pay a marginally lesser premium for a life cover.

There are no sociological reasons or women empowerment motives behind this discounted rate. It’s just biology at work. Women have a higher life expectancy compared with men, and because they live longer, the risk to their lives, and hence, the insurance cover to pay for the loss of life is low. Most women are required by the insurers to pay a lower premium than men for the same amount of cover. This has led to the launch of a number of plans that cater specifically to women.

The average life expectancy of a woman in India is 67.2 years, while the same for a man is 65.6 years. This results in a discount of roughly two years. By this calculation, a 32-year-old woman will need to pay a similar premium as a 30-year-old man.

The lower pricing of the premium for women is also because the health risks are lower for them. For instance, diseases such as a severe heart ailment and diabetes are more common among men.

Though women enjoy the benefits of a lower premium because of longevity, they tend to lose out when they opt for an annuity plan as they earn lesser amount compared with men. The women lose out on annuity for the same reason that entitles them to lower premiums—life expectancy. This is because when it comes to paying pension, the outgo is for a longer period for women, which means that the annuity decreases marginally. However, this should not stop them from taking a life cover at the earliest.

• Buy insurance to meet your needs, not because it is available at a discount.

• Check the rate differential with your insurer to know the monetary benefit that you can get.

• When adding riders, opt for ones that cover health risks that are specific to women.

Published on: Dec 23, 2008, 12:01 PM IST
Posted by: AtMigration, Dec 23, 2008, 12:01 PM IST