Why Women Should Get Life Insurance

Life insurance means protection against risks in life. It is important for a man, so is for a woman, even though she is not considered a breadwinner in a conventional manner. In today's world, a woman's contribution to the finances of a family cannot be ignored. But women are seen to be holding themselves back when it comes to buying life insurance. Life insurance can be an emergency fund and help meet one's objectives. Most men are aware of this; it is the time for women to know this and get themselves insured.

Amita, 30, has been looking at getting some insurance policies. She is a working mother with a young child of 2 years. Her husband is a businessman and looking at their financial position she realises that there has to be adequate planning done so that there are no bumps on the way. Her main concern is about the ability to look at the requirement for insurance and the manner in which she will be able to protect her family. She is also wondering as to whether taking some woman-specific policy will be of any help.

Analysis
Since Amita is married with a child, life insurance becomes an absolute necessity for her. But she does not know what amount of coverage will be adequate for her, and hence will require enough knowledge as well as clarity of goals to get the right amount of coverage. Several factors like her age, salary, and family status will have to be considered to determine the coverage amount.

Finding out adequate cover for her and her family

Amita needs to ensure that the insurance cover she is getting is adequate for her and her family so that in case there is an impact on existing income due to some unfortunate event like her death or loss of job then the situation can be managed.

Insurance requirement can be found out by comparing the income and expenses and looking at the savings available over the life, which is then brought down to today's prices. The other way is to look at the earnings and savings over the lifetime of the earning member at today's values.

Why term insurance is a good idea?

At a young age, a term insurance policy can provide Amita enough cover at a reasonable cost. In event of her death, her family will receive sufficient amount to maintain their standard of living. It can fund her child's education, help pay off dues and provide capital for her husband's business.

Ensuring good future for her child

Amita might require some additional policies to provide the necessary cover for her child apart from the term insurance. This could ensure a regular cash flow coming in at specific points in time, covering the education needs or some other requirements of the child. Here the point to note is that there is a cover on the life of the parents and not the child because the funding will be available from the parents.

Thinking of retirement

Insurance is considered to be an effective way to manage retirement expenses. Amita thus needs to choose policies like whole life or endowment that will accumulate cash value over the time and pay dividends on a regular basis. Another reason to get a life insurance is women tend to live longer than men, so it is more likely that they have to take care of their expenses after the death of their husbands.

What about women-specific policies?

Many insurance companies have launched women-specific policies. These are targeted at women and hence might seem to be sufficient to meet some basic requirements. However, Amita should also consider other possibilities and opportunities available in the market. In many cases, the requirement might be completed by general policies, thus doing away with the need to buy women-specific policies.

Building it up

Insurance portfolio is built up in a systematic manner over a period of time. The insurance need has to be considered at different points in time. There has to be a continuous evaluation to ensure that there is also some shift that is taking place with respect to the cover taken. This will involve new policies and even change in the level of insurance cover.