Insuring women: what works best
Do women need insurance? To be more precise, do they need exclusive plans for them? After all, they too are human beings and like men, have their own financial, health and protection needs. Moreover women generally live longer than men and are exposed to certain life risks that men do not face, such as giving birth.
The changing requirements of modern world are said to be behind the strong-felt need for women-specific insurance plans.
Says Sanjay Jain, head marketing, Bajaj Allianz Life Insurance, “With the concept of nuclear families growing and both men and women equally contributing to family income and lifestyle, women are feeling the need to take cover for themselves as well as their family.”
Women-specific insurance plans, therefore, are expected to meet at least three potential requirements—health and medical issues specific to women like pregnancy and breast cancer, short-term investment plans as most women plan their carrier for a short tenure, which involves a break when they plan for kids and pension planning to help them meet their future requirements.
The irony, however, is that so far woman-specific insurance plans don’t give a wider choice to their prospective customers and barring one or two exceptions—like LIC’s Jeevan Bharati plan—all other policies are available in the form of riders only, that too female critical illness riders. Worse, most of such plans—like LIC’s Jeevan Sneha and Birla Sun Life’s Woman First Plan—have already been either discontinued or are not being marketed at all.
As far as LIC’s Jeevan Bharati is concerned, it is a money back plan for women which provides life insurance cover throughout the term of the plan along with the periodic payments on survival at specified durations during the policy term.
The plan, however, also provides cover against affliction of certain ‘female critical illnesses’ and occurrence of certain congenital disabilities in newborn children. But these extra benefits come at a price—in the form of ‘extra’ premium—and are not optional. Therefore, a woman is required to shell out more under this policy even if she may not require these additional benefits.
Any wonder then that such women-specific insurance plans are eliciting poor response in the market? However, that is not the case with riders, which are optional, cost less and can be attached to the base policy of your choice.
For instance, Birla Sun Life’s Critical Illness—Woman Rider can be attached to a base plan keeping a woman’s needs and lifestyle in mind. Targeted at the 20-50 age group, the product covers up to a maximum of Rs 10 lakh and is available for 10-30 years. In total, it covers 29 illnesses or conditions, which makes it one of the most comprehensive critical illness riders available in India.
Likewise Bajaj Allianz Life’s MahilaGain rider can be attached with the company’s InvestGain, CashGain, New UnitGain and New UnitGain Plus plans. The rider covers 11 critical illnesses, and for a 20-year term and Rs 2-lakh cover, a 30-year-old woman is required to pay only Rs 1,100 annually under this plan. Bajaj Allianz General Insurance has also developed a critical illness insurance plan—Smart Advantage—for UTI Bank’s Smart Privilege customers, and the plan is said to be doing well.
Thus, while women-specific plans work better as riders, they fail to deliver as full-fledged insurance policies. And the reason is not far to seek. As T Srikanth Bhagavat, MD, Hexagon Capital Advisors, says: “Unless there are reasonable advantages for women in opting for woman-specific plans, it would remain a marketing gimmick only!”