What's in it for me?

Insurance plays a ‘double role’ in your life, making it a unique mode of financial planning.

In a survey conducted, a shocking 80%* of who (professionals / households / families, etc) believed that they would not be able to survive for more than 6 months on their current savings if they were to lose a major source of household income. Therein lies the primary purpose of insurance – to empower your dependants financially in the unfortunate event of your death. All you need to do is pay a premium every year for a fixed number of years, called the policy term. Should you die during the policy term, your dependants will receive a pre-decided amount called the sum assured that will enable them to maintain their current lifestyles. True, you may not be the only earning member of your family. But as long as you as a woman is working and helping to support the family, insurance is necessary for the sake of your spouse, children and parents. It is insurance that provides the resources to maintain household expenses, to pay off loans, to cover the costs of education and to meet other financial needs in your absence.Whether you are single, just married or a married woman with children, there is no substitute for insurance.

Of course, it’s very likely that nothing untoward will happen to you till the end of the policy term. In such a case, insurance helps you create wealth. You as a woman would like your children to get the best education possible. You’d like your parents to have a comfortable old age. You yourself would like to have a secure retired life. If you survive the policy term, you still receive the sum assured. This money can help you meet your financial goals and achieve your dreams.

Insurance is also a tax saving tool as the amount you pay as insurance premium is exempt from income tax. Unfortunately, many Indians take insurance solely for the purpose of tax saving. While the tax benefit is a useful add-on, it is important to understand that the main benefit of insurance lies in financial protection and long term wealth creation.

In this context, there’s a question that is often asked by women. “Since I am a housewife, do I really need to take insurance?” The answer is yes. Maybe you are not earning. But should something untoward happen to you, then all your tasks – right from managing the household to looking after the kids - will have to be performed by someone else. And that will cost a fair bit of money. That’s why it is imperative that you insure yourself for an equivalent amount.

Despite the unique benefits of life insurance, only one out of four Indian households owns a life insurance policy. The main reason is a lack of awareness about insurance and its benefits. Not all realise that insurance provides you with an unparalleled feeling of security. After all, it feels great when someone has taken care of the future. And it feels even better when that someone is you.

*Source: Tata AIG Life, Life Matters Survey 2007-08