30-year-old Sumedha is a working mother. She and her 33-year-old husband, Karan have a three-year-old son named Aryan.
While Karan works in an IT company and holds a senior position with excellent remuneration, Sumedha is a teacher in a private school.
Sumedha and Karan have big plans for their family, and they tend to live quite a luxurious urban life with some loans to pay off every month through instalments like:
- Home Loan: which extends for a period of 20 years
- Personal Loan: which extends for 10 years, and a
- Vehicular Loan: which extends for a period of 5 years
These loans do not include their daily expenses for regular entertainment, dining out, and more.
Considering all these, Karan has been postponing his plan of purchasing a life insurance policy which may protect him against big loan amounts, for some time.
Karan suffered from a heart problem and suddenly needs hospitalization. After about 4 days in the hospital, he succumbs to heart failure and passes away.
Considering the fact that he still had not purchased that insurance policy, his family will now have to grapple with the emotional loss as well as the burden of repaying loans, along with daily expenses.
If Sumedha had managed to buy life insurance products on time to share the burden of her husband, do you think her financial situation would have been better? Of course, right?
Financial planning is important for men as well as women if they want to live a stress-free life.
Why Women Need Life Insurance More Than Men?
According to a study by the International Labour Organisation (ILO), of the 28.2 million individual life insurance policies (including term life insurance as well as traditional plans), issued in 2017-18, only 9 million were bought by women in India.
A survey conducted by irDAI (Insurance Regulatory and Development Authority of India) also concluded that Indian women bought only 32% of the individual life insurance policies sold in the period of 2017-18.
Another survey by Max Life Insurance found that only 19% of women in metropolitan cities own term life insurance policies, as compared to 22% of men.
The study also deduced that most working women focus their savings on children’s education and family expenses, while their male counterparts are supposed to take care of financial investments.
This needs to change. As you’ve seen in the imaginary case of Karan and Sumedha, women need to take precautions to ensure that they never face such a dilemma.
And, just like her life partner, the woman must take responsibility for her future and that of her family.
Most families today, treat life insurance plans as tax saving tools, purchasing only the amount of insurance required to save on annual taxes.
To make matters worse, people don’t even take the trouble to read the policy documents, or understand their needs before purchasing any insurance policy, which often results in them making the wrong decision.
In this article, we provide valuable life insurance advice to help you learn how to choose the best life insurance policy for your family.
The Benefits Of Life Insurance Plans
Several life insurance companies in India float all kinds of cheap life insurance policies, claiming to provide huge benefits when you need them.
What is required is your own understanding of what you need so you can choose the best life insurance for your family.
Before we go deeper into this subject, remember that insurance is a tool which you can utilise to gain maximum benefits, so it must be purchased keeping in mind certain aspects like:
- Covering liabilities
- Securing a good future
- Earning a regular income after retirement
- Receiving medical aid
Let’s look at each aspect in detail:
Big loans, such as home loans and personal loans are usually required to be paid off in small, regular instalments over a number of years.
These loans need to be secured in such a way that they can be paid off easily in the event of an emergency.
You can do this by taking pure term insurance for the same amount as the loan so that it can provide you with a large cover, available at a nominal life insurance premium.
Securing a Good Future
With endowment plans, you can receive a certain amount of return after a few years. In some insurance plans, you can receive a percentage of the returns every 4 to 5 years, with the last instalment in the last year of the policy.
You can also get an insurance plan in which the entire sum is given only at maturity with added bonuses.
Certain unit-linked plans with a capital guarantee are also good ways to ensure returns on investment. These plans, however, are a bit more expensive, so it is necessary to understand the exact way in which they function.
Children’s plans also go a long way towards ensuring a secure future for your child. You can receive periodic payments made out during the term of the policy to meet various expenses.
In the case of an eventuality, this type of plan typically helps fulfil your financial needs pertaining to education and marriage.
Regular Income After Retirement
While you’re in a job or business, the inflow of funds is relatively regular. But after retirement, this is no more the case. If you buy a pure pension plan, it can provide you with a regular annual income post retirement.
A woman with a regular job is eligible to buy life insurance of any amount (insurable interest), while home-makers, with no regular income, may get only a minimum amount of insurance as per the policy guidelines.
Medical insurance is available for individuals as well as the entire family. This form of insurance comes in handy in the case of major surgeries or for hospitalisation costs.
Today, options like cashless surgeries are easily available, where the insured person does not have to make a payment to the hospital (except for expenses not covered by the policy) as all payments are handled by the Insurance Company directly.
Top 10 Life Insurance Plans For Women In India
1. LIC New Jeevan Anand Plan
This is a participating traditional endowment insurance plan for an entry age of 18-50 years, and a policy term ranging from 15-30 years.
Endowment policies provide both investment returns and protection coverage, so the premiums are higher.
The insurer is assured of receiving a minimum amount of INR 10 lakhs, while there is no limit to the maximum sum assured.
2. SBI Life eShield Plan
This is one of the best term insurance plans with an entry age of 18-65 years, and a policy term ranging from 5 years to 30 years.
The minimum assured sum to the insurer is INR 20 lakhs at the end of maturity, while there is no maximum limit.
3. LIC New Endowment Plan
This is a non-linked endowment plan, with the entry age of 8-50 years, and a policy term of 12-35 years. This plan assures the insurer of a minimum sum of INR 1 lakh and no maximum limit.
4. Aviva i-Life Plan
This term insurance policy has an entry age of 18-55 years and a policy term of 10-35 years. It assures the buyer of a minimum amount of INR 25 lakhs at maturity.
5. HDFC SL Crest Plan
This unit-linked insurance plan is a 10-years investment plan with an entry age of 14-55 years. It pays off about 10-20 times the premium amount. You can also avail tax benefits under this scheme.
6. SBI Shubh Nivesh Plan
One of the most popular life insurance products by SBI Life, this policy offers both endowment benefits and live coverage with some additional benefits, in the form of accidental death and disability benefits.
7. LIC Jeevan Saral Plan
This endowment plan with a policy term of 10-35 years offers a minimum assured sum, amounting to 250 times the monthly premiums, to the insurer.
8. AEGON Life iTerm Plan
This cheap insurance plan can be bought online and offers flexible premium pay options in the form of single pay or regular pay.
Although this insurance plan offers no maturity benefit, it covers 4 additional rider benefits and also helps you avail tax benefits.
9. Birla Sun Life BSLI Protect@Ease Plan
This term life insurance policy guarantees a minimum maturity amount of INR 30 lakhs in a policy term of 5-40 years.
10. Max Life Online Term Plan Plus Basic Life Cover
The minimum sum assured for this plan ranges from INR 25 lakhs to 100 crores over a policy term of 10-40 years.
As women, we tend to rely on others to make certain decisions on our behalf, whether it is to purchase life insurance or make any other kind of investment.
It is time that Indian women actively take an interest in their own financial decisions, and help in securing their family’s future.
Life insurance costs may vary from one company to another. Make sure you research the market well before buying any life insurance policy to minimise risks and maximise returns on your investment.
And even as you consider our life insurance advice, don’t bet your financial future only on life insurance policies.
Learn where and how to invest money in India so you can save tax, diversify your investments, build wealth and plan for the future.
Some of the best investment plans allow you to invest your money in zero-commission plans and get tax-free returns unlike 10% capital gains tax in mutual funds.
Disclaimer: All investments, including real estate, are speculative in nature and involve substantial risk of loss. The ideas and strategies on this website are based on personal opinion. They do not and should not be considered as professional financial investment advice and should never be used without first assessing your own personal and financial situation, or without consulting your professional investment advisor. We advise you to do your due diligence before acting on any information that we publish and do not, in any way, warrant or guarantee the success of any action you take in reliance on our statements or recommendations.
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