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Majority of women in India are not adequately covered by life insurance

Women life insurance

A majority of Indian women in India are not covered by a life insurance policy or are heavily underinsured. According to the insurance regulator IRDAI’s annual report, the share of women in the year 2019-20 has decreased to 32 per cent in number of policies and 34 per cent in First Year Premium compared to 36 per cent and 37 per cent respectively in the year 2018-19.

The basic rule of life insurance is that every earning member of the family must have life insurance cover of roughly ten times the annual income, as there is financial impact on the family in the event of death, illness or disability of the earning member. Life insurance protects the family against the financial impact.

 “Even in case of women who are homemakers, there is a certain financial value of their role in the household. In such cases, the required size of life cover could be linked to estimated financial value of their role, and it should also be benchmarked against the life cover of the spouse/earning member,” said Suresh Agarwal, Chief Distribution Officer, 

Kotak Mahindra Life Insurance

“Today more women are stepping into the workforce and become breadwinners of their families and there is an immediate need to protect their income. Considering the given scenario, it is important for women to move towards financial liberation and exploring insurance and other financial instruments for savings as well as protection. A life insurance cover can help them buffer the loss of income in case of their sudden demise, said Santosh Agarwal, CBO-Life Insurance, Policybazaar.com.

The importance of life insurance for women is no different from men and is equally crucial for their family’s well-being. Considering these factors, women should seriously consider investing in life insurance particular pure protection plans – term life insurance, Agarwal from Policybazaar added.

Annual Report 2019-20

Parameters for life insurance for women

Insurable interest, ‘human life value’ and premium paying capacity are some of the key parameters that are taken into consideration for financial underwriting towards providing risk protection through Insurance.

Some key assessment parameters include annual income earned, occupation, education, need for insurance and complete existing insurance details. These assessment parameters are gender agnostic and are purely to assess the extent of coverage that the individual may need to financially secure his or her family in case of untimely loss of life, said Sonia Notani, Chief Marketing Officer, IndiaFirst Life Insurance 

Parameters of Assesment for Life Insurance

For homemakers, what is to be assessed while proving life insurance is the need of the family from the perspective of the home maker and the product can be a term insurance or savings plan based on the family, its income level, dependence, life cover of the male income earner, current economic wellbeing of the person etc, said Manoj Jain, Managing Director, Shriram Life Insurance Co. Ltd.

Agarwal from Policybazaar adds that it is important to note that home-maker women can only get a joint life cover along with their spouse. In order to avail maximum protection, it is advised to get a cover with higher sum assured. While buying a policy, it is advised to get equal coverage for both husband and wife.

Women as insurance agents

Around 30% of the individual agency force in India is women and are having good career and income opportunity while helping other families secure their future. Secondly considering the emotional quotient, women are superior in communicating the need for life insurance to the family, the need which is driven by love, care and emotions for the family, added Mr. Jain from Shriram Life insurance.

A life insurance policy provides much needed solutions for women’s financial security against risks like financial protection on spouse’s premature demise, women-specific health risks and adequate income for retirement. Let’s work towards bridging this gap.

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