Page 44 - Insurance Times May 2022

they must buy protection against risks like disability and
CLOSING THE illness). How much cover a woman buys should be based on
objective criteria. Experts use one of tow approaches.
One is human life value, where the cover purchased is linked
GENDER GAP to a person's earning potential over her lifetime. The second

is the insurance need analysis that takes into account the
THROUGH TERM family's current and future expenses and goals.
Besides the main cover, women should buy a critical illness
rider and a waiver on premium rider (which will ensure
INSURANCE continuation of the policy, even in the case of disability). A
separate critical illness policy and disability cover can also be
purchased from a general insurer (terminating a separate
policy is easier).
O ne in every three policies is sold to a woman in Don't look for returns

Avoid purchasing insurance in combination with investment
India, reveals a recent State Bank of India
plans. "You can't buy adequate protection in such plans. The
Ecowrap report. But according to PolicyBazaar,
the trend witnessed on its platform is that women
Agarwa. "Return on premium term plans should also be
account for only around 15 per cent of term policy buyers. premium for a Rs.1 crore cover would be exorbitant," says
avoided as they are not cost-effective," adds Maheshwari.
Most insurance experts concur that women don’t buy term
insurance — one policy that can provide adequate protection Housewives: Curbs are being removed
— in large enough numbers. While housewives don't have a tangible source of income,
the duties they discharge carry financial value. Hence, they,
Working woman’s apathy
too, need to be insured. Insurers impose limitations on the
Working women often fail to purchase adequate term cover. amount of cover they offer them, chiefly to avoid moral
“Most women who buy term insurance are single mothers or hazard. "If the husband has a policy, we offer the housewife
single women. Within families, the situation that largely a sum insured equal to 50 per cent of the husband's cover,"
prevails is that the male member, who is the sole
Vishakha.
breadwinner, is expected to be insured," says Vishakha R M,
managing director and chief executive officer, IndiaFirst Life Some insurers place more limitations. "Sometimes, not only
Insurance. must the husband have a policy, his income should provide
eligibility for both the husband and the housewife's cover,"
Financial planners agree. "Many women in the formal sector
says Sajja Praveen Chowdary, business head-term life
rely on the group life cover provided by the employer. They
insurance, PolicyBazaar.
don't buy a personal cover," says Mrin Agarwal, founder-
director, Finsafe. Assume the husband has an income of Rs. 25 lakh. An insurer
offers him a cover 5x his income (Rs. 1.25 crore). What if he
According to Renu Maheshwari, a securities and exchange
buys a Rs. 1 crore policy? The wife is eligible for 50 per cent of
Board of India-registered investment advisor and cofounder
the husband's cover, or Rs. 50 lakh. Together, their cover
and principal advisor, Finscholarz Wealth Managers, "Even
becomes Rs. 1.5 crore, while the husband is eligible for Rs.
in cases where the wife has a higher income than the
husband, she sometimes has equal cover." 1.25 crore only. The wife can get only a Rs. 25 lakh cover.
"The majority of term policies have a starting sum insured of
Policy cover should depend on contribution Rs. 50 lakh," says Chowdary.
Whether a person needs term insurance has nothing to do Recently, Max Life Insurance launched a policy for the
with gender. "If a person makes a financial contribution, has housewife wherein if the household income exceeds Rs. 5
dependents, and his/her absence could have a financial lakh, she can purchase a cover of Rs. 50 lakh, with no questions
impact on them, he/she should buy a term cover," says asked. Thus, her purchase doesn't depend on whether the
Maheshwar. husband has a policy or its sum insured. More insurers could
Single women with no dependents can do without it (although launch such plans to make it easier for housewives to get
covered. (Source: Business Standard)
44 The Insurance Times, May 2022