News March 9, 2020

Women Economic Empowerment Resulting in Increased Life Insurance Ownership

Presently, women can control and utilize their assets, resources, income and time in an efficient manner that has resulted in the immense improvement of the economic status and well-being of women. In today’s era more than two-third of Indian women make a huge part of the workforce of India. Their leading roles in banking, finance, healthcare, the education sector have reached new limits. The massive contribution of women towards the socio-economic development of India is beyond definition.

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With the increase in the self-worth of salaried women, there is also an increase in their realization about the need for their life insurance for securing their economic status against the uncertain events of their life.

Present scenario of Life Insurance ownership among salaried women:

Today’s urban Indian woman have not only understood their self-worth but also have realized the importance of investing in a life insurance plan for themselves separately. They have realized that it is crucial to own life insurance to take care of the financial responsibilities of their husband, dependent children, and parents in case of their unfortunate absence. Taking into account the scenario of awareness about importance of life insurance ownership and mental preparations about uncertain unfortunate events of future, the recent one-year survey ending January 2020, shows the increase in life insurance ownership by 500 bps up to 70% where term insurance showed an increase of 700 bps up to 28% as compared to last year. It highlights an increase in ownership of Life Insurance policy among the women of Indian urban areas. The study has revealed that while there is only a 3% increase up to 71% in life insurance ownership among men, there is an 8% increase up to 67% in life insurance ownership among Indian urban women. The study has also given a breakup, for a better picture of the situation, of increase in life insurance ownership among the salaried class as 4% up to 75% and in case of the affluent class, it is a 6% increase up to 79% as compared to the previous year.

Type of life insurance preferred to be owned by a working woman:

The working women of Tier-II cities are more interested in investing in plans for enhancing their savings rather than for protection. So, they are more preferred customers of endowment policies rather than term insurance policies. Having lesser income as compared to working women in metros may also be one of their reasons to have such investment behavior. Unlike Tier-II women, metro working women are more interested in returns than investing in long-term plans.

Understanding the behavioral study of life insurance ownership of working women :

Understanding of the reports over the past 12 months shows that term plan awareness and ownership has improved over these months. The knowledge index that measures the awareness level has also increased by 9 points to 48. Among all the investment plans awareness of term plans show an increase of 10000 bps to 57%. The improvement of 2 points in the IPQ ( Indian Protection quotient) which is a result of the increase in life insurance awareness and ownership implies that working women are feeling slightly more financially protected now. This has resulted in ownership of term plans increasing by 700 bps to 28%.

As awareness and ownership have increased, at the same time the anxiety among salaried women has also increased about future financial security which will result in improved financial planning. Though there is awareness about term plans among metro city salaried women, still their financial planning is showing ownership in endowment plans leading at 30% as compared to term plans. This is a result of rising anxiety levels about the high rising medical expenses, day to day expenses of running a family, maintaining lifestyle and economic status.

Moreover, the Tier II working women having lower income as compared to the salaried women in the metros are more anxious about their financial security as they are underprepared to deal with the financial instabilities from the unfortunate uncertain events of life. They remain feeling unsecured with a very low IPQ score of 32and knowledge score of 43 which is a resultant of seeking the return on premiums on term plans as the only benefit they want from term plans.

Now coming to the critical illness cover situation among Indian working women, presently as low as 10% term insurance owners make an additional investment on critical illness riders. However, understanding the urgency of critical illness cover is growing among salaried women.

However, the rise in awareness quotient will definitely improve all these situations in the near future.

Conclusion

Over the years, women have been historically conservative about their financial planning and have been investing more in golds and other traditional instruments. But now as a result of an increase in awareness among them, salaried women have started smartly investing in life insurance plans for financial security and return.

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