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Business News/ Insurance / News/  Covid-19 has re-emphasized the relevance of insurance in a woman’s life

Covid-19 has re-emphasized the relevance of insurance in a woman’s life

The pandemic has made people realize the need for health insurance

Covid-19 has re-emphasized the relevance of insurance in a woman’s lifePremium
Covid-19 has re-emphasized the relevance of insurance in a woman’s life

As a woman, you play different roles and handle many responsibilities. During the pandemic, we have seen women contributing as healthcare workers, caregivers, innovators and effective national leaders. You could be a professional or a homemaker—no contribution is small. You are in charge of your physical and emotional well-being. In today’s times, there’s a third aspect that you need to take charge of completely—your financial well-being. If you are financially independent, you are in control of a significant part of your life.

Financial independence does not depend on your work profile or how much money you earn. What’s important is that you start early and plan to save towards your long-term goals as well as to protect your loved ones in your absence.

At HDFC Life, we have witnessed an increasing trend of working women purchasing life insurance policies. In 2019-20, out of the policies purchased by women, approximately 50% were by those below 38 years of age and 40% of them earned between 5 lakh and 15 lakh. Both of these were higher than the previous years. Also, the premium spent on pure protection policies by women in 2019-20 increased by more than 60%, while savings increased by 20%, thus showing an increasing awareness among women of the need to financially protect their loved ones.

There is a lot left to be done on the awareness front as the growth in uptake among women is still low compared to that among men.

As per the Insurance Regulatory and Development Authority of India’s latest annual report, in 2019-20, women accounted for 32% of the new life insurance policies sold as compared to 36% in 2018-19. In terms of the first-year premium too, women’s contribution declined to 34% in 2019-20 as compared to 37% in the previous year.

Life insurance products not only provide financial protection but also enable one to do financial planning. There is clearly a need for greater awareness of the different product categories available and their relevance for women.

Protection: Women as earning members of the family need a term insurance cover that is at least 10 to 15 times their annual income. It can be an income replacement in case of an eventuality. At HDFC Life, we have seen the average premium paid by women towards such policies more than double in the past five years, indicating that women are becoming increasingly cognizant of the role they play in managing their family finances and hence realize the importance of being insured.

Health: The pandemic has made people realize the need for health insurance and allied products. A medical emergency can lead to a financial setback for the family. A hospitalization policy is, therefore, a must. Further, one also needs to financially prepare to deal with non-communicable, life-threatening diseases such as cancer and heart ailments. Fixed benefit plans and riders offered by life insurers are designed to provide significant financial support in these situations.

Savings and investments: We all have long-term goals such as buying a house, children’s education, retirement or a dream vacation. The savings and investment plans offered by life insurance companies help build a corpus over the long term in a disciplined manner, thereby translating your financial goals into reality.

In this segment, we have seen women taking an increasing charge of their finances—their average premium at HDFC Life for such products has grown 1.5 times in the past five years.

The need to secure savings and future income in a volatile environment is high. There are guaranteed return life insurance plans that offer an opportunity to lock in current levels of interest rates on future investments along with a life cover. The returns offered under these products can be attractive depending on the investment horizon chosen and your own risk appetite. Participating savings products too can enable you to generate regular income for life.

Unit-linked plans are ideal if you have a higher risk-reward outlook. With their low charges, these can work well if you continue with the plan for the entire policy term, since any market volatility is ironed out over that period, ensuring potentially superior long-term returns over various asset classes.

Retirement: Retirement years are said to be the golden years in your life. Inflation and rising medical expenses can impact one’s retirement savings. Opting for an annuity plan enables you to generate guaranteed regular monthly income after retirement, for as long as you live.

The past year has made everyone realize that setbacks can come most unexpectedly. However, tough times can also present the opportunity to pivot to a better future. You can bounce back with the right spirit when you are financially secured and well-planned. So, choose an appropriate life insurance plan to protect yourself and your family members and help them bounce back from tough times.

Vibha Padalkar is MD & CEO, HDFC Life.

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Published: 05 Mar 2021, 05:46 AM IST
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