Women have paved their way into almost every field, whether it is being a homemaker or a smart co-worker or both at the same time. However, in times of crisis, women suffer the most, whether it is running the household on a tight budget or giving up their careers in the interest of the family or more.
Hence, more than anyone else, women should always have a safety net in place. In case of any eventuality such as a divorce, a job loss, early spousal death, a major illness, or even for managing a big debt, women can then remain financially prepared.
Here are three ways in which women can build a safety net for themselves and their families:
This is the most basic piece of financial safety net. An emergency fund, also known as a ‘rainy day fund’, is that amount of money that needs to be stashed away in investments or accounts that are easily accessible such as liquid funds or bank savings accounts.
You usually set it aside for unexpected expenses or crisis. These events could include a divorce, a job loss, a medical need, among others.
Ideally, you should keep aside money that is equal to at least three to six months of expenses. You should not touch this money during normal times.
The amount you keep aside should depend on factors such as your job stability, job of your spouse, the number of dependents you have, your current living expenses, among others.
According to industry experts, a woman must recognise her value and choose solutions that provide protection against life dangers. A lot of women seem to be recognising this fact.
In the year 2021, out of the 4,000-5,000 women customers coming onto Policybazaar website, 48 per cent invested in a term life cover with a sum assured of Rs 1 crore and above, while the other 30 per cent invested in a cover of Rs 50 lakh and above. The share of term life policies bought by women in the age group of 30-40 years was 45 per cent in FY21-22, whereas the share for the age bracket of 41-50 years was 13 per cent.
The payment mode may depend on the affordability factor. “About 70 per cent women (who bought term insurance from Policybazaar) chose to buy term life insurance on monthly premium basis, while 26 per cent went for yearly premium payment option,” says Sajja Praveen Chowdary, BU head, term life insurance, Policybazaar.com.
Term insurance is the cheapest and purest form of insurance which can help you take a large cover at a relatively lower cost. If you die during the term, the nominee gets the sum assured but if you survive the term, there is no pay-out. “Given today's lifestyle, it's all too easy to be diagnosed with a terrible illness, sustain an unexpected injury, or even die. Your life insurance policy can protect you from all of these eventualities by ensuring that your family's lifestyle is maintained even if you lose your job. In the last two years, we all realized the importance of having financial security in the form of insurance,” says Santosh Agarwal, chief business officer of life insurance, Policybazaar.com.
As per data compiled by Policybazaar for FY 21-22, the share of policies bought by women in the age-group 25-40 years stands at 45 per cent, whereas the share for women in the age bracket of 40-55 years was found to be 30 per cent. This shows that awareness around health insurance has gained traction as more women have started to invest in health insurance for themselves to remain financially protected against unforeseen medical emergencies.
The sum insured opted by most women is Rs 5-10 lakh with a share of 18 per cent, while the second most preferred choice was the Rs 1 crore cover with a share of 15 per cent.
The chances of developing health complications or diseases increase with age. It would not be wise for a woman to depend only on her spouse for her health or medical needs. It is mandatory to invest in a good health insurance policy even if your employers is providing one.
With these three things, you would easily be able to create a financial safety net for yourself. The next step could be building wealth for yourself.
