~Tata AIA’s survey reveals that Indian women mostly depend on the ‘man of the house’ for financial planning needs~
• Families’ financial security is more important to women than their own
• 59% of working women do not make their own financial decisions
• 39% of respondents believe their financial planning is limited to monthly budgeting
• Among the 42% of women who understand financial planning better, only 12% are housewives
• When given a choice, 44% of women prefer to make their own decisions
• 72% of women believe life insurance is integral to their financial planning post-Covid-19
India, 11 October 2022, Mumbai: India has witnessed a noticeable increase in the proportion of women in the professional sphere from the ground up to the boardrooms, thanks to many positive factors contributing to this. However, a Tata AIA Life Insurance (Tata AIA) survey about Financial Awareness Among Women reveals that Indian women still shy away from making independent financial decisions. The survey also found that they still rely on the ‘man of the house’ when it comes to making financial decisions, although 44% of respondents prefer to make their own financial decisions when they have the option to do so.
Key Survey highlights:
Marriage and Financial Planning
The survey findings indicated that 89% of married women depend on their spouses for financial planning. Before marriage, the father is responsible for the financial decisions for women, which then is tacitly passed on to the husband, post marriage. The survey also indicated that since the average age of women getting married is 20-22 years, they do not have the liberty of deciding about their finances. Thus, marriage is one of the foremost deterrent factors in impeding the independence in financial decision making for women.
Independence for planning finances
For 39% of the women covered in the survey, financial planning is restricted to planning the monthly budget. Of 42% of the women who have a better understanding of financial planning, only 12% are homemakers. According to the survey findings, for most women being financially independent does not necessarily mean they have the freedom to make their finance related decisions. Among the working women, 59% do not independently take decisions on their finances. The ratio is higher in tier 3 markets, where 65% of working women do not take independent financial decisions.
This behaviour is despite the intense narrative of women empowerment and gender equality that has been extensively deliberated over the decades. Laws against women have also been strengthened, and a positive shift has taken place over the years regarding the position of women in society. Yet when it comes to financial planning, women do not get to call the shots.
Intent towards Financial Planning
Given a choice, however, 44% of women are willing to make their own financial decisions. Encouragingly, in tier-2 markets, women are warming up to the idea of making their own financial decisions. Increased awareness of their rights and a general lifestyle upgrade could contribute to this change.
When asked about priorities, the survey revealed that women prioritise their family’s financial security over themselves. Among the various financial instruments, 62% of the women are more comfortable investing in Bank FDs for the benefit of their families. However, when asked about a preference for themselves, they trusted their spouse’s decision.
Attitude toward Life insurance
72% of women believe life insurance is integral to their financial planning post-Covid-19. The respondents from tier-3 cities feel more strongly about this. A savings plan was the most preferred among life insurance products, followed by term insurance. Pension plans and ULIPs are the least preferred options. However, when clearly explained about the different types of life insurance policies, women preferred ULIPs and term insurance solutions.
75% of respondents said ‘Trust’ is essential and would invest in a company they can trust. A detailed understanding of the product is another vital factor in the purchase decision apart from online channels and social media reviews. Further, women are willing to invest in life insurance solutions but expect to pay a lower premium. They also seek guaranteed income through the policy.
Commenting on survey findings, Girish Kalra, Chief Marketing Officer, commented, “Understanding our consumers is a critical component of our Consumer Obsession value. Women are an important stakeholder when it comes to financial planning, however very little is known about their preferences and attitude from a financial planning and life insurance perspective. This survey clearly reveals that we have a journey to travel as a society, to involve women more in the financial planning process. At Tata AIA, we will utilize the learning from the survey to introduce women centric solutions and encourage them to take control of their finances and necessary measures to ensure their own and their family’s financial future.”
Tata AIA Life commissioned the survey to specialized brand research firm eRusaem to gauge the financial awareness amongst women and the freedom to make their own decisions. The study was administered to a total sample size of 1000 respondents between the age group of 25-55 years across 18 main cities in India, spanning Metros, Tier 1 & Tier 2 markets.