Insurance Needs Of Financially Independent Women

In the changing socio-economic scenario, women need to take control of their financial lives as much as men do. Being adequately insured is a step in this direction, says Jay Sampat

Today, many women are financially independent and successful in life and no longer necessarily depend on parents or a partner for financial security. In fact, financially independent and upwardly mobile, professional, single women are more of a norm than an exception now. One does not enter into a marriage expecting a divorce or buy a new house with negative expectations. However, life takes its own course and unforeseen situations may arise to make a dent in your finances. In such situations, single women need to make sure they can not only survive on the finances they have, but plan for the future to tide through difficult times.

Investments which generate returns for the future and take care of one’s financial needs are the starting point of any financial plan, and surely women’s needs are no different when it comes to such planning. This is especially necessary in light of the “What if'?” questions such as – “What if your husband doesn’t take care of you or has not planned your finances well enough?”, “What if there was an eventuality in your family?”, etc.

However, even many financially independent and upwardly mobile, professional single women don’t have a clue when it comes to managing their money. Statistics tell us that in India men buy insurance far more than women. With changing times, this will surely need to change. For starters, health insurance cover is a must. It is all the more important to buy health insurance at an early age because premium rates are much higher if one enters the system at an older age. Moreover, while it may be possible to take care of small expenses, given the rapidly rising healthcare costs it always helps to have a safety net if you have to face a critical illness. So, make sure you chose a health insurance plan that meets your expectations, and ensure that you remember to renew it every year since health insurance is an annual contract.

Life insurance is often considered the second step of one’s insurance strategy. If you are single, you need life insurance only if you have old parents who are dependent on you or if you have a major liability like a home loan. This will enable your family to overcome a financial crisis by covering the cost of your liability in the event of your death. The advantage of a yearly term cover is that you can buy a larger cover for a smaller premium.

On the other hand, if you are a conservative investor, you can also choose a unit-linked life insurance plan (ULIP). These provide life cover along with investments in your choice of funds. However, remember that these make sense provided you are going to remain invested for the long-term and not exit in a hurry.

Life insurers now also offer riders like critical illness which you can attach to a vanilla policy at an extra cost. In fact, some insurers offer a critical illness rider that is tailored to suit the needs of women. Such riders cover women-specific diseases, among other things. Many life insurance companies also have products designed for women. However, on careful examination you may find that the differences are not particularly beneficial. Make it a point to compare products and companies before deciding on a life cover.

Another area of financial planning is insuring the assets you have built during your life. So, property/fire insurance are important to cover not just your home but also your other precious belongings. A householder’s insurance cover insures your home and its contents against natural catastrophes as well as other perils like burglary and fire. Such a policy would require you to declare the value of your possessions, and in the event of a disaster, you will be able to claim a replacement value for damaged or destroyed items.

Additionally, if you own a car, it is mandatory to buy a third-party motor cover for the vehicle. For a comprehensive cover (i.e., a combination of third-party cover and own damage cover), the prices will vary from company to company based on the type, year and model of the car. Other factors like your claims history and kilometres traveled also play a role in determining your premiums. Once you have these insurance covers in place, you will be financially prepared to meet any emergencies without too much of trouble.

As all experts will tell you, the key to a secure financial future is to start early, invest wisely and at the same time guard against unforeseen expenditure by insuring oneself. With more women getting educated and with a range of professions and salaries available to them, single women have the opportunity to make adequate preparations to secure their future. In such a scenario, managing finances wisely from the very beginning is absolutely critical.