Accurate and proportional representation of women in social systems has been shown to be important to long-lasting success of the human race. Additionally, a study shows that "absence is not merely a sign of disadvantage and disenfranchisement", but the exclusion of women from any position also compounds gender stereotypes and retards the place of equalisation.
The woman of today not only plays the traditional role of fostering and nurturing the family but also multi-tasks by showing an equal responsibility as men, towards being a breadwinner for the family.
Till a decade ago, there was a wide gender gap when it came to financial planning and insurance coverage for women. That gap has narrowed in recent years due to more equal opportunities for women in education and employment, a growing awareness about the need for life insurance and, more importantly, the fact that women's lives matter as much as men's.
The growth in participation of women in life insurance is evident from the latest annual report of the Insurance Regulatory and Development Authority of India (IRDAI). Women, who comprise about 48% of the country's population, accounted for 32% of all insurance policies sold in 2017-18. This indicates that women's contribution to economic growth and to the society is increasing every year.
Insurance companies are realising that the demise of a woman breadwinner has as much impact on the family as that of a male wage earner. With this in mind, insurers are encouraging more and more women to purchase life insurance and even customising products that meet their financial needs. Greater insurance penetration is also ensuring greater financial protection for women.
While women and men equally believe that their death would have a substantial impact on their family, women are not purchasing life insurance as frequently as men, nor purchasing as much.
The question still persists - Why do women value their life less than men do?
Maybe it's because the traditional rule of thumb for how much life insurance is needed is based on one's current income, usually 8 to 10 times approx. With women still earning less than men overall, and more likely to take on the role of child care, according to these calculations, women need less life insurance than men.
On the contrary, the value of a women's life and the role in the family is so much more than income.
From traditional job profiles like a housekeeper, dietitian, daycare teacher to evolved professions like network administrator, social media communications, and research scientist - a woman performs all!
The primary purpose of life insurance is to replace a lost income when a provider of the family dies. The problem is that there is so much more lost than just income when a homemaker dies. What about the value of the unpaid roles she is responsible for? Try estimating the value of a stay-at-home mother's work by tracking real-time market prices of all the jobs a mother performs.
Term Insurance is the ideal product for women who are changing roles, from homemakers to breadwinners, as it fulfils the twin objectives of financial independence and financial security, for themselves and their loved ones. Be it insurance or investment, a woman should be included in the financial planning of her family.
A term plan is the easiest, simplest and most affordable of all the insurance products. It gives the policyholder adequate-to-high cover for a fixed period of time and at economically low premiums.
On the untimely demise of the insured, a death benefit or the sum assured is paid to her loved ones or beneficiaries. However, if the policyholder survives the policy term, then she does not get any returns. For this reason, a term plan is known as a pure risk cover.
Low premium is one of the major benefits of a term plan. For example, if a married woman bought a Rs 1-crore term plan at the age of, say, 25, she would be paying a premium of as little as Rs 500 a month or Rs 6,000 for the year.
Once bought, the premium is fixed and does not increase with age! This is a small price to pay for what the insurance cover offers in the event of her untimely death.
Her spouse or beneficiaries can utilise the sum assured as collateral for a loan or spend the amount on the children's higher education and marriage.
While she may not be around to bless her children, she will still have given them a gift they will remember all their lives.
Some of the other notable benefits of term plans for women include special premium rates, plans with an option to select one or more critical illness cover, cover for women related health issues, lower premiums compared to cash-value or money-back insurance policies and a comprehensive cover for the future financial needs of her loved ones.
To sum up, by purchasing a suitable term plan, a woman ensures complete financial security of her dependents, thus playing an active role in the family's financial planning process. It also gives her a sense of purpose and self-worth and makes her an equal partner in her married life.
(The author is Director, Strategy, Exide Life Insurance)