- Date : 06/11/2015
- Read: 6 mins
There is a lot of scope for Indian women to secure their future financially. For this to happen, it is important that women are aware of the various options they have.
Women are often considered better at saving money and planning household finances compared to men. However, Indian women lag behind their male counterparts when it comes to financial security. Instances of women choosing insurance as an option for financial security are also few.
A recent IRDAI report states that the ratio of women with life insurance cover compared to men is merely 20:80 in the government, and 21:79 in the private sector.
Due to changing lifestyles, the unpredictability of life, and the increasing contribution of women to household income, it is imperative for women to secure their financial future and that of their loved ones by buying insurance.
Here are some forms of insurance that women need, to ensure their financial security.
- Buy a life insurance cover
A life insurance plan is the most basic insurance that you need to secure the financial future of your family.
If you are a homemaker and your husband is the sole breadwinner in the family, you must make sure that your husband buys a life insurance cover.
If you are a working woman, you must definitely buy a life insurance policy for your own self. Since you are sharing the responsibility of the household expenses, it is only fair that you share the responsibility of financial protection too. Even if anything happens to you, the pay-out your family will receive will make sure that your husband doesn’t feel the sudden brunt of managing household expenses all on his own.
If you are a working single mother, then it goes without saying that you need life insurance coverage as soon as possible to protect your child(ren).
If you are a single woman with no dependents, the life insurance payout could be exactly what you need to pay off loans in the future. To know more about why women need life insurance,click here.
2. Be prepared for future health threats with health insurance
While the increasingly changing nature of our lifestyles poses health threats to both men and women, the latter, in particular, seem to be affected more, with certain major non-communicable diseases on the rise.
As per recent research, 47, 587 women died of breast cancer alone in India in 2013. Another study revealed that3 out 5 Indian women under the age of 35 are at risk of getting affected by heart disease. The cost of treatment of these diseases is very high and it could be very difficult for a middle-class person to afford medical expenses as the bills could run into several lakhs of rupees.
Related: Critical illnesses and their financial implications in India [Infographic]
This is not to scare you but to make you realise the importance of health insurance so you are always prepared for any health-related eventuality. A health insurance coverage will make sure your husband and/or family members do not have to worry about money when it comes to your medical treatment should you suffer from a serious illness. To get an idea about the high costs for the treatment of certain critical illnesses, click here.
3. Secure your children’s future with a child plan
As a parent, your child’s happiness is of utmost importance. You want to make sure that your child’s future is secure and all his or her dreams come true. However, with inflation and the increasing cost of education, things get very difficult for parents. It is therefore important that you secure the financial requirements of your child’s career by investing in a child plan.
You can either invest in a child education plan or a child insurance plan, depending on your needs. To know how they differ, click here. Depending on the plan you buy, you can take care of the expenses at any stage of your child’s education - primary, secondary, or higher studies. You can use the money to fulfil your child’s dream of studying in an Ivy League college, for instance. You can also use it for other purposes like your child’s marriage, etc.
4. Invest wisely in mutual fund SIPs
Systematic Investment Plans (SIPs) are a great way to start your investment journey and build for a solid financial future. Mutual funds are managed by professional fund managers who deploy and manage the corpus on your behalf.
One can choose from thousands of different schemes that cater to different investment mandates and risk profiles. With the investment threshold as low as INR 500, SIPs offer a hassle-free and smart way to invest your money.
You get to choose the right mutual fund scheme, the amount, and the frequency of investment (monthly, quarterly etc.). The amount gets auto-debited from your account basis the frequency you have chosen ensuring that you never miss a deadline while your investment is able to maximise yield. You can use these funds on maturity or whenever you might need to withdraw them to buy a home, fund your child’s education or travel.
5. Buy gold to build a safety net
Gold may not be a currency anymore, but the value of the metal holds true across the world. Unlike currencies, the lustre of gold has a universal appeal and is considered an extremely liquid asset, especially in times of high inflation or geopolitical uncertainty.
Gold can play an important part in diversifying your investment portfolio. It usually has an inverse relationship with other asset classes such as paper money, bonds, etc. In the event of paper-based investments taking a plunge, gold prices rise in contrast to allow for some protection of your portfolio value.
With gold highly valued in Indian families, gradually adding to your gold assets will help you in the future to meet several crucial expenses.
6. Spend your golden years in peace with a retirement plan
While your husband might have a job that offers him pension after retirement or might have bought a retirement policy, this may not be enough for both of you. Your monthly income will decrease while inflation will continue to rise. It will, therefore, become very difficult for you and your husband to maintain the same lifestyle that you did before retirement.
You need to make sure that you also have a source of income post retirement by buying a retirement plan. Also, since women are usually likely to outlive their husbands, a retirement cover will make sure that expenses are well managed in the unfortunate event of the partner passing away.
With more women turning into breadwinners for their families along with their husbands, financial security is something they cannot and must not live without. Insurers seem to be realising this as well. This is why they are coming up with insurance policies specifically designed for women. These insurance plans are available to cover and secure requirements at different stages of your life. You don’t need insurance just for your family and children’s needs, but also for your own as an individual.
Related: Insurance policies to protect what's important to you [Infographic]