3 ways women can create a financial safety net

Women have blazed a trail in almost every field, whether it’s being a housewife or a smart co-worker or both. However, in times of crisis, it is women who suffer the most, whether it is managing the household on a tight budget or giving up their careers for the sake of the family or more.

Therefore, more than anyone, women should always have a safety net in place. In the event of an eventuality such as a divorce, job loss, premature death of a spouse, serious illness or even to manage a large debt, women can then remain financially prepared.

Here are three ways women can build a safety net for themselves and their families:

Create an emergency fund

It is the most basic piece of the financial safety net. An emergency fund, also known as a “rainy day fund”, is the sum of money that should be stored in easily accessible investments or accounts, such as cash or savings accounts banking.

You usually put it aside for unexpected expenses or a crisis. These events could include divorce, job loss, medical need, among others.

Ideally, you should set aside money that is equivalent to at least three to six months of expenses. You should not touch this money in normal times.

The amount you set aside should depend on factors such as your job stability, your spouse’s job, the number of dependents you have, your current living expenses, among others.

Buy life insurance

According to industry experts, a woman must recognize her worth and choose solutions that provide protection against life’s dangers. Many women seem to recognize this fact.

In 2021, of the 4,000-5,000 female customers who visited the Policybazaar website, 48% invested in term life insurance with a sum assured of Rs 1 crore and above, while the remaining 30% invested in a hedge of Rs. 50 lakh and above. The share of term life policies taken out by women in the 30-40 age bracket was 45% in FY21-22, while the share for the 41-50 years was 13%.

life insurance

The method of payment may depend on the affordability factor. “About 70% of women (who purchased term insurance from Policybazaar) chose to purchase term life insurance on a monthly premium basis, while 26% opted for the pay-the-premium option. annually,” said Sajja Praveen Chowdary, head of term life insurance at Policybazaar. .com.

Term insurance is the cheapest and purest form of insurance that can help you take out significant coverage at a relatively lower cost. If you die during the term, the candidate receives the sum assured, but if you survive the term, there is no payment. “Given today’s lifestyle, it is all too easy to be diagnosed with a terrible disease, suffer 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. Over the past two years, we have all realized the importance of having financial security in the form of insurance,” says Santosh Agarwal, Commercial Director of Life Insurance, Policybazaar.com.

Don’t ignore health insurance

According to data compiled by Policybazaar for fiscal year 21-22, the share of policies purchased by women in the 25-40 age bracket is 45%, while the share of women in the age 40-55 was found to be 30 percent. This shows that health insurance awareness has been gaining momentum as more women have started investing in health insurance for themselves to stay financially protected against unforeseen medical emergencies.

Representative image of health insurance
Representative image of health insurance

The sum insured chosen by most women is Rs 5-10 lakh with an 18% share, while the second most preferred choice was Rs 1 crore cover with a 15% share.

The chances of developing health complications or diseases increase with age. It would not be wise for a woman to depend solely on her spouse for her health or medical needs. Investing in a good health insurance policy is mandatory even if your employer provides one.

With these three things, you would easily be able to create a financial safety net for yourself. The next step could be to create wealth for yourself.

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