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Reasons Why Life Insurance Is Important For Women

dateKnowledge Centre Team dateDecember 06, 2020 views145 Views
Reasons Why Life Insurance Is Important For Women

Life insurance is a contract between an insurer and a policyholder. By far, it gives out payment after the person dies for their respective family. Is it beneficial for a woman to invest in a life insurance policy? Yes, often more so for women, this plan can prove to be a financial safety-net for unforeseen emergencies for homemakers. With changing trends, women are now moving towards financial liberation by exploring insurance and other financial instruments as a savings mechanism.

What is the role of women in society?

Women and girls represent the largest contingent of this unenviable group, and of the 1.3 billion people who live in poverty, 70% are women. From having the power to handle half the workforce to playing the central role of being a mother, sister, wife, daughter, and homemaker, it is not uncommon for women to be called the 'money manager' of the house in Indian families.

The following reasons will help you understand why and what will be the benefits of a life-changing insurance plan:

  • Peace of mind- It can allow women to be freer physically and financially to pursue their goals.
  • Cost-effective- A more cost-effective way of saving your income and securing your substantial coverage.
  • Saving for your future helps secure your household's dual-income well after your partner's and your retirement.
  • Leaving behind a legacy- Your children can use the monetary benefits of your insurance.

Why and when a woman must invest in a Life Insurance plan?

Investing in life insurance is best done while you are still young and relatively healthy. The older you become, the more the need grows to save for any further emergencies throughout your life.

Your life insurance gives your family choices by providing the benefits to help pay off debts, meet housing payments and ongoing living expenses, fund college educations for your children or grandchildren, and much more. Life insurance provides financial stability when it's needed most.

An investment strategy for beginners

Before taking the investment plunge, you must determine your long-term or short-term financial objectives as an investor. Do you want to build up a corpus to fund your child's education? Are you saving for your wedding expenses? Or, is investment merely a tool for making quick money for you? The reason why setting your final objective in coherence with the total capital invested and the net earnings expected should always be your first and foremost priority.

The first time investor and term plans

A Term Plan is the first and straightforward tool for investing. As the name suggests, term plans are essential life insurance covers having systematic premium pay-outs over a fixed period. The significant benefit of term plans has to be the simplicity of the cover and the added tax benefits. For young women who have just started working, term plans are incredibly affordable. The low premium is one of the significant benefits of a term plan. For example, if you bought a Rs 1 crore term plan at the age of 25, you would be paying a premium of as little as Rs 500 a month or Rs 6,000 for the year.

Single women have expenses

Often, single women do not get themselves insured since they have no one who depends on them to provide food and shelter. But you have to realize that in the unfortunate event of you passing away, the burden of car loans, education loans, and even home loans are something that your families would have to look after. A term plan is an excellent option for a single woman.

Are you still planning to work after your 60s? Make a smart choice and invest your money smartly. Staying fit after the 60s is a big challenge. Therefore it is fair that you have health insurance coverage to be assured of a financial backup if a medical contingency arises.

Choose your best plan

Nowadays, we come across many ads describing which insurance plan is best to support women; it all depends on you. The plan that suits you the best is the plan that you choose.

  • RETIREMENT INSURANCE PLAN- ensure you lead an independent life in your retirement years.
  • CHILD INSURANCE PLANS- the best way to secure your child's future.
  • HEALTH INSURANCE PLAN- customize to cater to health requirements.
  • Be your family’s strongest pillar

A woman's life makes a difference to so many people around her. Do you have a desire that your children have the best education and pursue all their dreams? Financial backing can help your child ensure all those vast expenses. Secure your child's future by investing in the best possible plan.

Contribute to your family’s income

With the changing time and the change in people's mindset, it is becoming necessary that every woman have their life secured. Life insurance helps women secure their savings, income (if any), and long-term or under unforeseen circumstances help the entire family.

Minimize your premium rates

Women often get cheaper premium rates in comparison to the male counterpart. The premium is discounted to entice female participation in buying a life insurance plan. Usually, 10% to 20% of the premium is waived off when a woman takes a policy.

How much life insurance a woman should have?

The ideal life insurance should be at least 5-10 times her income and savings. Enough life insurance will help you and your family in the long run. A report from Insurance Regulatory and Development Authority of India (IRDIA) says women comprise 48% in this country in which only 32% of insurance policy was sold in total in 2017-18, which gives us how a women's growth and contribution towards the society is increasing every year.

Also, insurance agents are encouraging more and more women to buy a life insurance plan. The insurance agents and other intermediaries have successfully sold insurance to only 139 women out of a population group of 10,000 women. It indicated that they did not approach either a large number of women or a large number of women have declined to consider life insurance as a beneficial financial instrument.

Women's contribution to economic growth and society is increasing every year. The number of women buying life insurance is increasing rapidly. India's most trusted life insurance corporation, the most trusted by women, concludes that the proportion of LIC sold by them is 39%, while for private investors, it is 27%.

Life insurance coverage is suitable for anyone at any life stage. Individuals at varied stages of life can make the wise decision to grow their wealth, build their dreams and nurture their loved ones' aspirations for a better and brighter future by understanding the vital role of life insurance in financial planning. This life insurance policy will help women and every individual who wishes/desires to take up insurance in their life. Lack of insurance of any family member can affect the rest of the family members' financial and emotional well-being. Therefore, it is always advisable to take up insurance plans seriously and always read each plan before jumping to conclusions.

Suppose a woman working somewhere must get their life insurance for their safety. Also, women should not ignore taking life insurance to protect their future life. Plus, they should not think that they aren't eligible to take the policy because they don't earn. It would be best if you had protection from nearby casualties.

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Frequently Asked Questions (FAQs) for Term Insurance

This being a term plan doesn't offer any payout after maturity or expiration date.

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 70 years of age.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly.

If your key purpose is to give your Family financial protection, go for the term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, a term plan pays a part of the sum insured to treat your disease.

Term insurance riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term policy remains active until the expiration date.
  • Income Rider: The rider ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to ask while buying Term Insurance?

  1. 1. Amount of premium you have to pay based on your age, habits, education, and monthly income
  2. 2. The total number of benefits covered in the term plan. Do they include benefits that you care about the most?
  3. 3. How to save money on tax if you pay for the term plan?
  4. 4. Do they offer regular income options?
  5. 5. Can you change the coverage and premium in the future?
  6. 6. Does the claim consider valid if death occurs outside India?
  7. 7. Which kind of death is not covered by insurance?
  8. 8. Can NRIs take term insurance? If yes, what are the conditions?
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