Historically, life insurance was viewed as something that was primarily for men because men have often been seen as the breadwinners. However, that view has changed dramatically. Today, women are contributing to the household as much as, if not more than, men. Women are making more and more significant financial decisions for their families. In that regard, life insurance is equally important for women as it is for men.
Interestingly, although women and men require term life insurance, there are differences in who pays the premiums. Women typically have lower premiums than men, and this is related to areas such as life expectancy and risk profile. Understanding these areas is crucial because it allows families to make better financial decisions and to ensure that everyone, regardless of gender, has the right amount of protection.
Gender and Life Insurance: The Basics
When you buy a life insurance plan, your premium is determined based on several factors: age, health, lifestyle, and even gender. Yes, gender plays a role too. Research shows that women, on average, live longer than men, about five years longer globally. Insurers consider this while calculating premium rates, as longer life expectancy means fewer early claims.
As a result, women usually enjoy slightly lower premium rates compared to men of the same age, lifestyle, and health profile. For instance, a 30-year-old woman buying a term life insurance plan may pay around 13–15% less premium than a man of the same age.
This difference might seem surprising, but it is a reflection of statistical data, health factors, and lifestyle trends.
Why Do Premiums Differ Between Men and Women?
- Life Expectancy: Women generally live longer, giving insurers a better chance to collect premiums over a longer period.
- Health Risks: Men are statistically more prone to lifestyle diseases such as heart conditions, lung problems, or liver issues due to higher rates of smoking, alcohol consumption, and stress-related habits.
- Accident Rates: Globally, men are more likely to be involved in accidents due to riskier driving and outdoor activities.
- Lower Risk Profile: Women are less likely to engage in high-risk behaviours, leading to lower overall claims.
Put simply, insurers see women as lower-risk policyholders compared to men, which explains the difference in term life insurance rates.
A Practical Example
Imagine two young professionals, Sachin and Divya, both 25 years old, non-smokers, and living similar lifestyles. They approach an insurer for a 40-year term life insurance plan. To their surprise, Divya’s annual premium is about 15% lower than Sachin’s, even though everything else is the same. The only difference? Gender.
This practice is known as “gender rating” in the insurance industry. It reflects the claim probability based on actuarial studies, ensuring insurers price policies fairly while balancing risk.
Why Should Women Consider Buying Life Insurance?
Traditionally, many women overlooked buying life insurance, especially if their partners were already insured. But with women increasingly becoming breadwinners or co-providers, it’s vital to secure their family’s financial future. Here’s why:
- Financial Security for Dependents: In the unfortunate event of death, a term life insurance plan ensures dependents are not left financially vulnerable.
- Affordable Premiums: Women can take advantage of lower premiums, especially if they buy policies at a younger age.
- Critical Illness Cover: Women face increasing risks of lifestyle diseases such as obesity, backache, or depression, as highlighted by health studies. Adding riders like critical illness cover strengthens protection.
- Peace of Mind: Knowing your family will be financially secure provides emotional reassurance.
Tax Benefits Explained Through a Story
Let’s consider an example.
Suppose Meera, a 32-year-old working woman, buys a term life insurance plan with an annual premium of ₹20,000. Under Section 80C of the Income Tax Act, she can claim this premium as a deduction.
- With insurance: Her taxable income reduces by ₹20,000. If she falls under the 30% tax bracket, she saves ₹6,000 in taxes.
- Without insurance: She not only misses out on the financial cover but also ends up paying an additional ₹6,000 in taxes.
This shows how life insurance is not just about financial protection but also about smart tax planning.
Men vs Women: The Broader Perspective
While men usually pay higher premiums, it doesn’t make life insurance any less essential for them. In fact, since men often carry higher financial responsibilities, ensuring adequate coverage is crucial. Women, on the other hand, should not ignore insurance just because their premiums are lower. Both genders must view term life insurance as a safety net, protecting families against financial uncertainties.
Women-Centric Plans and Riders
Some insurers even began to offer a women’s-only insurance policy, which included benefits like maternity, waiver of premium due to critical illness or premium discounts. This shift is certainly encouraging women to make informed choices about financial protection consciously.
Conclusion
The life insurance gap between men and women explains not only how insurers assess risk (based on data, lifestyle and health) but more significantly, that what matters most cannot be expressed by the numbers.
Women should take advantage of their lower premiums and commit their energy to invest early in term life insurance. Men’s insurance decisions shouldn’t take long at all, either, as time is only allotted for premiums to be more rather than less, depending on health and age. Who you pay should not matter – what matters is that you want to leave your loved ones in a position to always be financially protected, with or without you.
When choosing a plan, starting with reputable insurers like Aviva India ensures access to expertise, competitive claims settlement ratios, and customer-focused service, among other benefits. After all, the future is not a matter of man or woman – we all have a respective, shared responsibility to protect the future of our families.
