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Insurance Article

Reasons Why Insurance Penetration is Low in Women

December 11 2017
Insurance Penetration is Low in Women

There are several reasons that can explain why fewer women opt for insurance

Life insurance penetration in India is at 2.72%, and the general insurance penetration is 0.77%, as per a report by global reinsurer Swiss Re. During FY17, in India the insurance density or the premium per capita stood at USD 59.7 as against the global average of USD 638.3. While the insurance penetration is low in India, it is even lower for women.

Insurance Awareness Campaign was conducted by NCAER during March-August, 2010. As per this pre-launch survey report, the male-to-female ratios among those having life insurance was 80:20 for government policies, and 79:21 for private policies. The male to female ratios among those having general insurance was 85:15 for government policies, and 81:19 for private policies. Things have not changed much. Let us understand why insurance penetration is low among women.

Few Women Discuss Money with Family and Friends

Be it home or corporates, women are playing important roles. However, when it comes to personal finance, they avoid discussing about it with people around them. According to Fidelity Investments Money FIT Women Study 2015, significant number of women are raised with finance not being part of their conversation.

Around 56% respondents found it too personal to share their financial decisions. Almost 80% refrained from discussing with people close to them. This introverted attitude could be a significant contributing factor to lower participation of women in insurance investment.

Women Depend on Men for Finance-Based Decisions

Majority of women depend on some male family member – father, husband, or brother, for investment in financial products. They may be covered in the family group insurance, but they rarely buy personal insurance plans. As per an industry expert, women are mostly covered in family floater policies held by husband. Only single mothers or divorcees take individual insurance plans.

Male Are Primary Bread Earners

In India, even today, men are the main bread earners. Insurance policies cover the risk associated with them in terms of health, and life. Since consumer durables are funded mostly by their income, they purchase general insurance to cover them.

According to a World Bank report, India ranks 120th among 131 nations in women workforce. In India, the women participation in the workforce was just at 27%, while in China and Brazil it was between 65-70%. Since less women are employed, they get left out from employer-based insurance cover.

These are the various reasons that lead to lower insurance penetration among women. But now, more women are becoming financially independent and thereby financially contributing towards home rent, purchase of consumer durables, and so on. With rising income among women, the time has finally come for them to buy insurance policies that provide cover in situations where help maybe needed most.

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