Purchasing an insurance policy at the age of 35 is one of the best decisions one can make. The premium is lower and the coverage is high. However, there is no one size fits all policy for all 35 year old women. Each woman has her own goals, priorities, financial situation, varying number of dependents, etc. Hence, the right policy entirely depends on every woman’s needs and priorities in life.
However, depending on whether their goals are short term or long term, for oneself or their dependents, they can be provided three different types of products.
1) Term plan: Insurance is mostly bought by those who have dependents. A 35 year old with children can have different types of dependents. She can have her children, her parents, her in laws, a sibling, or a distant aunt as her dependents. They may depend on her to finance education, their medical care, or their maintenance. In the event of her sudden death, an insurance plan would be the only way their future can be secure. If you have a similar situation, a term plan would be the best recourse. Term plans provide affordable options to provide full protection and financial stability to your dependents. Death or disabilities due to accidents or diseases are covered in a term plan and can provide a larger net for your entire family.
Hence if you have an untimely demise, your dependents will be financially secure. At the same time, your children will have education financed, your parents/parents-in law or both will have their medication needs met, and your sibling can have the same lifestyle as she had when you were alive.
2) ULIP Plans: ULIP plans bring you the best of a mutual fund and insurance under one roof. In a ULIP plan, a part of the premium paid by the customer goes towards insurance payment and the remaining is invested in equity and debt instruments. Many unit linked insurance plans provide for protection, savings, and investments, children’s education and marriage, retirement, health and even customized plans for women. This is perfect for those women who are married, have children or are independent but goals are for the distant future. These are special products that will work whether you are a mother of young children or an independent woman. If you are a single woman, there is no better plan than a ULIP plan because, at the end of the career, your plan will start giving you a monthly pension. If looking to fund your children’s education or save funds for post-retirement, then a ULIP plan will serve both purposes.
3) Augmented combo plans: Cancer is emerging as one of the biggest reasons for mortality in India. The Indian Council of Medical Research had projected that there would be 8 lakh deaths because of this dreaded disease in 2020. Incidentally, cancer strikes more women in India than men. Cancer treatment at a credible hospital could be quite costly and may run into lakhs. Therefore one may also want to look at term plans which provide additional benefits such as lumpsum payout of waiver of premium in case of cancer diagnosis.
Any plan should be taken considering your financial status, your immediate and future priorities, and the various worst case scenarios that can manifest itself in the future. Whatever be your plan, consult a financial planner for a solid plan with a reasonable premium.
Now we address the second part of the question.
Is it necessary to have insurance more than that provided by your company?
Yes, it is necessary to have insurance more than that provided by your company. Though the insurance provided by your employer may save you the hassle of searching for the right insurance among the various companies promising you the best coverage, there are quite a few compelling reasons to opt for an insurance plan different from your employers.
Benefits are fewer: Your employer would provide you with a basic insurance plan that will not have many benefits. If you are single, then an employer provided basic insurance plan may suffice however, if you have dependents like children, old parents, etc. you will need more coverage than what your employer provides you.
You may lose your job: This is the biggest reason an employer provided insurance may not be the safest move. In today’s world of zero security, one can lose his or her job at any time. When one loses his or her job, he or she also loses the insurance benefits. However, with a standard insurance plan, you will have lifelong coverage irrespective of whether you have a job or not, as long as you can pay the premium.
Insurance plans vary with companies: Unlike a provident fund plan that is portable across companies, an insurance plan expires once you have left the company. Each company has its own plan with a different set of benefits.
Death benefits do not take into account non salary incomes: The compensation received by family members when an earning member dies is calculated purely on the basis of the deceased person’s salary. However, a full-fledged insurance policy may take into account other incomes like property given on rent, incomes from fixed deposits, mutual funds, etc.
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