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Women are making their way to the forefront of monetary activities. They are taking financial initiatives by securing employment and business opportunities. The number of women joining work in the middle-class category is further proof of the same.
Women who generate their income must focus on building an investment portfolio. This will aid their long-term goals. Investing in financial tools such as life insurance is essential for women to collect savings for financial freedom. Investment for women is essential as it allows them to collect wealth and make it grow over time.
In this blog, we will understand the importance of the right investment portfolio and why life insurance is the perfect investment scheme for women.
Importance of the right Investment Portfolio for Women
One of the first steps of earning the right investment portfolio for women begins by securing their sunset years with a life insurance policy. Moreover, by investing early in their career and reviewing their investment portfolio periodically, women can avail of a financially secure future and funds to combat emergency expenses. Here are some reasons to have the perfect portfolio:
- Financial Security
The very core of what most people earn for is financial security. The right investment portfolio helps women mitigate risks with adequate funds. It also helps them tackle financial emergencies without depending on others.
- Essential for Life Transitions
Marriage, divorce, family planning, etc, are financially taxing. These life transitions become easy to tackle with the right investment portfolio. Making an investment portfolio will help women have adequate resources to manage unforeseen circumstances.
- Seed Capital
Women are entering the entrepreneurial sector and an investment portfolio ensures that they have enough seed capital to lay the foundation of their own companies.
- Protection against Inflation
Investing is the simplest way to combat inflation. By eroding the purchasing power of money, investment generates wealth-retaining returns. Additionally, there are Indian government investment schemes for women, such as the Mahila Sanman Savings Certificate, with which women are provided with options to become financially stable.
Now that you have a brief idea about the importance of a women investment portfolio let’s look at the need for life insurance inclusion.
Five reasons why Life Insurance should be a part of Women's Investment Portfolio
A life insurance policy is considered one of the best investment plans. It includes benefits like paying monthly installments, aiding financial security, and leading toward financial freedom. It is also the key to financial stability during times of emergency. Here are a few reasons that support this:
- The best investment strategy for beginners
A term life insurance plan is a simple women investment tool. As the name suggests, term life insurance covers systematic premium pay-outs over a fixed period wherein significant benefit is derived from the added tax benefits and the cover amount.
Ideal for young women who are new to the work sphere, life insurance is incredibly affordable.
- Regular expense management
Every essential commodity and luxury is getting expensive by the minute, making it difficult to manage expenses daily. Moreover, when women depend on their spouse or family members without getting themselves insured, they depend on commodities as basic as food and shelter.
In any unforeseen event and to tackle regular expenses, a life insurance plan is ideal for women to make money and invest smartly. As of old age, the health insurance coverage of a life insurance plan will render financial backup in case of medical contingencies. Even for women with critical illness, life insurance plans are designed to cover the loss of income during their treatment period with the right riders.
- Cost-effective premiums
Life insurance premiums are decided as per the policyholder's risk profile. The riskier the profile, the higher the policy premiums. Since women have a lower risk profile than men, a life insurance policy is an attractive investment prospect for women with lower premium options.
- Wealth Accumulation
Life insurance policies aid women in wealth accumulation to easily meet their short, medium, and long-term financial goals. This includes child education, marriage, retirement corpus, and property investments. Some saving-driven life insurance policies offer lucrative returns and tax benefits in addition to wealth creation.
- Tax Benefits
Investing in life insurance allows men and women to save on premiums and secure a financial cushion for themselves. Additionally, multiple Indian government schemes for women have made it possible to save on tax via the maturity benefit offered by life insurance plans.
As per Section 80C of the Indian Income Tax Act, you can claim a deduction from taxable income on the premium paid toward life insurance for yourself, your children, or your spouse. The maximum allowable deduction is up to ₹ 1.5 lakhs.
Indian government investment schemes for women, including mutual funds, public provident funds, and special life insurance schemes, are an added benefit for an expansive investment portfolio for females.
Conclusion
Life insurance gives women financial confidence. It is also a safety net for single mothers or single women, so they don’t have to rely on anyone else for their finances. Additionally, investment for women ensures that the family is cared for even when the caregiver isn’t around.
Life insurance cover is one of the wisest decisions to yield wealth and nurture your savings for a better future. Hence, investing in life insurance is one of the best investment plan that allows women to simultaneously meet their short-term and long-term goals and save up for financial emergencies.
It is recommended to thoroughly understand your saving requirements, future planning, and portfolio needs before investing in an insurance plan.
