Sunday, March 11, 2012

International Women's Day: Fair deals for women in financial matters

MUMBAI: As the world gears up to celebrate Women's Day, let us look how the fairer sex is treated in the financial space. Well, to be frank, we have to say that they are indeed treated fairly -- be it taxes, investments, or insurance, women do enjoy certain privileges compared to their male counterparts.

They benefit from higher tax exemption limit, are also eligible for cheaper life insurance premiums and even have products designed specifically to suit their needs. Besides, employers' group health covers as well as certain standalone policies also undertake to pay for maternity-related expenses. Here is a list of some of the noteworthy advantages women enjoy:


Premium is an area where women clearly have an upper hand. All life covers levy lower mortality charges for women policyholders, thereby bringing down the overall premium. For instance, under Aegon Religare's online term policy, a 30-year-old male will have to pay an annual premium of Rs 3,900 for a 50-lakh cover with a 20-year tenure. All parameters remaining the same, a female policyholder will be charged Rs 3,500 under the same policy.

Similarly, under Kotak Life's term plan, the rates for women are cheaper by nearly Rs 1,000. This differential is thanks to higher life expectancy of Indian women. "Women-centric insurance products tend to be cheaper, since they have lower mortality risk than men," says Suresh Agarwal, executive VP and head, distribution and strategic initiatives, Kotak Life.

"Further, since there are situations and events that are exclusive to women, such as income replacement during a sabbatical after pregnancy, cervical cancer etc. it makes business sense to design products exclusively for women." Life Insurance Corporation of India's (LIC), too, offers an endowment policy aimed at women - Jeevan Bharti - that comes with congenital disabilities rider. It also features a three-year premium holiday benefit.


General insurers like Tata-AIG General and Bajaj Allianz offer critical illness plans intended to cover women-specific critical illnesses, with a particular emphasis on Cancer. Aegon-Religare Life has recently incorporated such a rider in the upgraded version of its online term plan. Clearly, companies are realising that women have different needs that have to be catered to.

"We have accessed data pointing to rise in the incidence of certain critical ailments in women. This implies that there is a need for specially designed products. For instance, congenital conditions are not covered under regular critical illness covers," points out Dr Renuka Kanvinde, senior manager, health insurance, Bajaj Allianz.

Congenital disabilities refer to conditions babies may be born with. So, such covers take care of expenses incurred by the policyholder towards her child's treatment in such cases. Since critical illness covers are fixed benefit plans, the lump-sum claim amount is handed over to the policyholder upon diagnosis of an ailment. If you are planning to buy one, do keep an eye on the terms and conditions - plans may prescribe a minimum survival period of 30 days post diagnosis.


All public sector banks offer a concessional rate of interest to girl students - they have to pay 0.5 percentage point lower rates compared to their male counterparts. Recently, the State Bank of India reduced interest rates on its study loans by 25-100 basis points across ticket sizes. Interest rate on loans between Rs 4-7.5 lakh has come down to 13.25% per annum from 14.25%. Further discounts are available to students joining prestigious institutions like IITs and IIMs. Again, girl students continue to be entitled to an extra 0.5 percentage point concession.


Some public sector banks like the Bank of India and Central Bank of India provide credit facilities for women entrepreneurs. Under the latter's Cent Kalyani scheme, loans are extended to self-employed women, professionals and those intending to set up small-scale businesses.

Bank of India allows women to borrow funds at a concessional rate under their mortgage loan scheme. The regular interest rate being charged is 14.75-15.25%, but women loan-seekers are eligible for lower rates of 14.5-15%.

However, before you set out to collect all that is on offer in your savings basket, you need to ascertain their utility value. No product should find a place in your portfolio merely because is carries a 'For Women' tag. It is up to you to cherry-pick the ones that make a compelling buy and serve your needs. The thumb rule is to ensure that they fit into your overall goal-based financial plan.

Source : ET

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