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Why women in India are missing out on life insurance

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By Vani Dua

6 min read | Updated on December 13, 2024, 10:32 IST

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SUMMARY

Life insurance coverage in India and around the globe has a concerning gender disparity, with women often invalidating their life’s worth and the need to get an insurance policy, regardless of whether they're earning or not.

Life insurance coverage is influenced by factors like income gap and labour force participation

Life insurance coverage is influenced by factors like income gap and labour force participation

Life insurance, a contract that provides a safety net in case of the death of a person, is seen solely as a monetary transaction between the insurance provider and the insured person. To some extent, this is the right way to think about life insurance—when you’re not considering the fact that the said tool is used to attach value to human life.

However, for many middle-class families, with limited disposable income after meeting basic needs—roti, kapda, aur makaan—life insurance isn't a priority.

As of 2021, around 35 crore of the Indian population has life insurance, according to data by the Insurance Regulatory and Development Authority of India (IRDAI). This means, almost 105 crore people in India, around 75% of the total population, are still uninsured.

When these statistics are broken down further, the situation becomes increasingly concerning. According to the annual report of IRDAI in 2023, only 34.2% of the total policies in 2022-23 were sold to women. This was lower than 34.7% in 2021-22.

I talked to a few women, who spoke on the condition of anonymity, to understand the reason behind these alarming figures.

When an educated 42-year-old woman—a primary school teacher singlehandedly managing household chores in her considerably progressive marriage—was asked if she has life insurance, her reply was, “Yes, I had until recently. Although it was up for renewal and while my husband insisted on getting it done, I only said it’s not necessary. I mean, what is the point? If something happens to me, my husband will be enough for our kid.”

When followed up by asking why her husband needs life insurance when she earns as well, she seemed to go on a train of thought. Her eventual answer was that he earns considerably more, which seemed reason enough to her.

A 36-year-old homemaker laughed when asked the same question. “What for? Meri kadar karne lage mere jaane ke baad wahi kaafi hai—If they value me after I die, that’s enough.”

She found the idea of having life insurance amusing because, despite years of unpaid domestic labour, she thought she hadn’t worked even a day in her life.

It may seem logical for the breadwinner to have life insurance, as monthly premiums are often seen as an unnecessary addition to routine budgets unless there’s a monetary loss after the insured's death. However, this logic falters when even working women in India largely lack life insurance coverage.

A 52-year-old working woman revealed she got life insurance only last year at age 51.

Despite managing a successful boutique and household finances, she had never thought about getting life insurance before.

“Kabhi socha hi nahi. Itni value nahi hai shayad meri life ki (laughingly)—I never pondered it. Maybe, my life isn’t that valuable.”

While this is a reality for many women in our country, there are others who do have a life insurance policy and understand its importance.

What about women who do have life insurance coverage?

A 31-year-old single woman, working as an analyst in a multinational consultancy firm, explained her reasons for getting life insurance.

“I value my life, and it satisfies me to think that I have attached the monetary aspect to it at a decent age. I got the policy a few years ago, and if I suffer an untimely death, my future husband and children will have financial security.”

Another woman, 28 and married, shared that she and her husband both come from financially weak backgrounds but they earn well today. They planned their future together and decided to get life insurance policies a couple of years ago.

However, while she has term life insurance, her husband has whole life insurance. Term life insurance is cheaper and is for a limited number of years, while whole life insurance is expensive but offers wider coverage. The reasoning for this was, “How does it matter? Both policies are for our children only, right? And he does earn more than me, so it makes sense.”
One 56-year-old woman, the sole breadwinner for her family of five, doesn’t have life insurance. Her husband and eldest daughter do, but she does not. When asked why, she said, “Kya farq padta hai bhai? Itna kaun sochta hai—How does it matter? No one thinks this much.” Despite being the primary earner, she insisted that policies for her husband and children are more important. Moreover, she added that her husband used to earn more and will start his business again soon.
This underscores a troubling trend: in traditional marriages, husbands typically handle life insurance decisions, and women often leave it to them. Women even insist that their husbands should do it, as they would probably know better. This highlights the level of financial literacy and autonomy women have in the country. From not having their own bank accounts to lacking control over household finances, many women question the monetary value of their lives, earning or not.

Even globally, life insurance coverage is higher in men than women. For instance, nearly 47% of women in the US had life insurance policies, as compared to 58% of men, as per a consumer study conducted by LIMRA in 2021. This disparity is worse in Asian and African countries.

Challenges faced by women

Life insurance coverage is influenced by factors like income gap and labour force participation. Globally, women face significant disparities in income and labour force participation compared to men. The global gender pay gap stands at around 23%, meaning women earn approximately 77 cents for every dollar men earn, according to the United Nations. Current estimates suggest that it may take 169 years to close this gap.

In India, the gender pay gap stands at around 60%, with women earning only 40% of what men earn for the same work, as per data by the World Economic Forum on economic gender parity. Key industries like technology have higher disparities. Social norms, workplace discrimination and limited access to leadership roles further exacerbate income inequality for women in India and globally.

Labour force participation rates also highlight gender inequality. Globally, nearly 47% of women participate in the labour force compared to 72% of men, according to International Labour Organization data, due to caregiving responsibilities and limited access to flexible work. In India, the female labour force participation rate is alarmingly low at around 37% for women, compared to nearly 79% for men, as per official government data. Factors like unpaid domestic work and restrictive cultural norms affect Indian women. Notably, rural areas see higher participation due to agricultural work.

About The Author

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Vani Dua is a journalism graduate from LSR College, Delhi. She is passionate about news and presently covers markets, business, economy, and other related fields. She is an avid reader and loves to spend her time weaving stories in her head.

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