The general notion of women wanting to invest in physical assets like gold and property need not be true. With awareness about different savings products increasing, women prefer to invest in life insurance products.
A survey done by India First Life Insurance and Assocham found that life insurance was the most popular choice of the respondents with at least 72 per cent wanting to invest in it followed by deposits both fixed and recurring at 69 per cent and mutual funds at 61 per cent.
Of them, 49 per cent preferred to invest in real estate, 48 per cent in gold and electronic traded funds and 43 per cent in PPF accounts. The choices that were least preferred by the respondents were bonds (19 per cent), stocks and equities (21 per cent) and pension fund account (36 per cent).
This popularity of life insurance can be attributed to the varied needs it covers, like that of savings and protection in one go. It can also be inferred that our respondents prefer safe returns compared to direct risks associated with equity or shares, but have started taking exposure to equity through the mutual fund route. The lower preference of gold and real estate can be attributed to the scenario changes post demonetisation.
“There is a potential for income growth of Indian women, which will convert them into a huge market for insurers,’ said RM Vishakha, MD and CEO of IndiaFirst Life Insurance Company.
When it came to time horizon in terms of investment, 46 per cent prefer investing for less than 5 years, 38 per cent up to 10 years and 16 per cent more than 10 years to achieve their financial goals. Majority of women (69 per cent) relied on their families while making investment decisions.
Within life insurance, 47 per cent of the respondents preferred money back plans, expressing the need for financial liquidity to maintain their expenses in the short term. Whole life policy was preferred by 35 per cent as it provides coverage for life, help in meeting the retirement and long term saving goals. Only 31 per cent preferred term life insurance.
The respondents, which included both house wives and working women, were clear about their financial priorities. Almost 68 per cent of the respondents wanted to use their surplus funds in investment plans and ensure a secured financial future for themselves against activities such as beauty treatments (6 per cent), short road trips (6 per cent), shopping online (12 per cent) or a coffee date with friends (7 per cent). It also points to the scenario where women have started valuing their own needs and are willing to make monetary decisions.
Their top 3 financial goals to be fulfilled through investments the first priority was protection of family and loved ones (73 per cent) and needs of children like education, marriage (50 per cent) came in the second spot.