Women influence financial decisions, must be part of financial planning too
When you purchase a car, its colour is chosen as per what your wife/ mom likes but, loan if needed is decided by the male members of the family. Automobiles may be the domain of men mostly but women are key decision influencers to its purchase. Here through some examples I will emphasise on how women influence financial decisions, must be part of financial planning too.
Traditionally in India all major financial decisions are taken by the males of the family. This means that most the times all insurance policies, investment products are purchased by men but their beneficiaries are ladies. Are these ladies aware of these financial products that they can make use of in times of an emergency? Are they aware what these products mean? Is there a circle of support that sits them down to understand the need and the end use of these products?
For example, we have normally seen cases wherein husband purchased a health insurance policy, he meets with an accident and is in the hospital. In this state of panic, the family is not aware of insurance policy and they finally end up borrowing from friends & relatives, in spite of possessing the important Health Insurance.
Solution is that women of the house should be part of all financial discussions and aware of all the financial decisions and investments. Here’s a look at a few options.
1 Medical Insurance: In case of any medical emergency, how much health insurance cover do they possess, where is the health insurance policy safely stored and contact details of insurance agent. These should be revisited a few times like an emergency situation.
2 Emergency Fund: An emergency fund equivalent to 6 months family expenses is normally suggested to be maintained by families. Women should not only be aware of this but they should also have authority to withdraw it. Therefore, we suggest keeping a joint FD in your primary bank for an emergency fund under withdrawal instructions of “Either or Survivor” and women being one of the signatory. Additionally a second layer of emergency funds could lie in mutual funds which can be withdrawn when required.
3 Life Insurance: In case of untimely Death of a member in family, women should at least know how much death cover husband carries, where is the insurance policy safely stored and whom to contact for getting claim. Again something that should be revisited regularly and we should keep track of terms and conditions.
After having control over above mentioned three aspects, emergency situations will still occur, but you will be able to handle them with complete confidence and without panic. As one of our women clients once said that when her husband met with an accident and was in coma in hospital, first day she was worried about her husband’s well being, but second day onwards she was more concerned about the arrangements for payment of enormous hospital bills.
After fully covering the emergencies that may arise in future, women must also ask the male members about their overall financial planning to meet major expenses. We all have housing loans, kids education, children’s marriage and utmost important – retirement. It’s never too late to plan. It’s also never to late to start a conversation and a plan to keep yourself secure.