Women are not just nurturers, but providers as well. They play a vital role in shaping the society and are equal contributors towards driving the economic growth of a country.
As a woman, you are possibly a co-earner or even the sole bread-winner in your family. This makes it important for you to plan your finances well so that you can fulfil your dreams and, at the same time, stay financially prepared for any situation. In order to achieve your goals, celebrate your milestones in life, and be prepared for any financial emergency, here are some financial planning tips you must consider.
1. Define your financial goals
The first step to sound financial planning for women is to define their goals.
A goal gives you clarity on how much money you would require to achieve it. This can help you stay focused and spend accordingly. Your goals can be based on the various milestones, like:
- Your higher education
- Your marriage
- Child birth
- Child’s education/marriage
- Buying a house
- Supporting the dreams of your loved ones, and many more
2. Start investing
Once you have defined your goals, you can calculate how much amount you will need to achieve them. While calculating the amount, consider inflation as well. Invest in a financial plan that will provide you with good returns to help you achieve your goals.
You can consider investing in a ULIP plan like the ICICI Pru Signature that provides you with the dual benefit of growth of your money and a life cover`. It provides you the option to invest in equity, debt, balanced or mix of these funds~ as per your risk appetite. You can switch between funds as per your choice. This enables you to take advantage of various market conditions for a higher return.
The plan also offers loyalty benefits^ where the insurer contributes to your investment as a reward for staying invested. It also provides more such benefits that further help to increase the returns from the investment.
3. Limit your borrowings
Borrowing money or taking loans may seem to be a convenient option when you need money. However, fulfilling your financial needs by borrowing money can tempt you to borrow more. This can create a huge financial burden on you. The interest charged on the borrowed money can further add to this burden.
Borrowing money should be a last resort. Instead of using a credit card for purchases, look for something that fits your budget and pay with a debit card or cash. Try to limit your expenses and clear off your loans as soon as possible.
4. Prepare a budget and stick to it
Preparing a budget helps you to be in control of your finances and keep track of your expenses. This tracking helps to identify unnecessary spending and limit them so that you can save enough for your long-term goals. It is important to stick to the budget so that you can manage your finances well.
5. Get a term insurance plan
Growing money is necessary, but it is also important to protect yourself and your loved ones. A term plan offers a payout to your loved ones in case of an unfortunate event, any time during the tenure of the policy. This ensures that your loved ones stay financially protected, not matter what.
ICICI Pru iProtect Smart term plan provides a large financial cover at affordable premium rates. It also offers other benefits such as:
Critical illness benefit(optional) -The plan covers 34 critical illnesses^^ which include chronic diseases such as cancer, heart related diseases, chronic liver disease, and more. On diagnosis of any of the illnesses covered by the plan, the benefit amount is paid up front. Submitting hospital bills is not required. This amount can be used to pay for the medical bills, for diagnostics, for recuperation, or for any other purpose. The critical illness benefit is an optional benefit that can be availed at a very nominal cost
Accidental death benefit(optional) -In case of an unfortunate eventuality with the policy holder due to an accident##, in addition to the life cover`, accidental death cover is also paid to the nominee. The accidental death benefit can be added to the plan at a very minimal cost
Terminal illness benefit -On the first diagnosis of a terminal illness~~, the entire claim amount provided by the policy is paid to the policyholder upfront. This helps to ease the financial burden during such times
Waiver of premium benefit# -All future premiums are waived off if the policy holder is diagnosed with a permanent disability# due to an accident. This ensures that the policy remains active without having to pay any future premium
Tax$ benefit -The term plans also help to save tax in two ways:
- The premiums paid towards a term plan are eligible for deduction from taxable income up to ₹ 1.5 lakh in a year, under Section 80C$ of the Income Tax Act 1961. The premiums paid towards the critical illness benefit is eligible for deduction from taxable income up to ₹ 25,000 in a year, under section 80D$
- The claim amount received is tax-free$ subject to conditions under Section 10(10D)$
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` Life cover is the benefit payable on death of the Life Assured during the policy term.
~ Past performance is not indicative of future performance.
^ Loyalty Additions are applicable from the 6th policy year onwards in the form of extra units at the end of every policy year. Each Loyalty Addition will be equal to 0.25% of the average of the Fund Values. You get an additional Loyalty Addition of 0.25% every year from the end of year 6 if all premiums for that year have been paid.
^^ Accelerated Critical Illness Benefit (ACI Benefit) is optional and available under Life & Health and All in One options. This benefit is payable, on first occurrence of any of the 34 illnesses covered. Medical documents confirming diagnosis of critical illness needs to be submitted. The benefit is payable only on the fulfillment of the definition of the diagnosed critical illness. The ACI Benefit, is accelerated and not an additional benefit which means the policy will continue with the Death Benefit reduced by the extent of the ACI Benefit paid. The future premiums payable under the policy will reduce proportionately. If ACI Benefit paid is equal to the Death Benefit, the policy will terminate on payment of the ACI Benefit. To know more in detail about ACI Benefit, terms & conditions governing it, kindly refer to sales brochure. ACI Benefit term would be equal to policy term or 30 years or (75-Age at entry), whichever is lower.
~~ A Life Assured shall be regarded as Terminally Ill only if that Life Assured is diagnosed as suffering from a condition which, in the opinion of two independent medical practitioners’ specializing in treatment of such illness, is highly likely to lead to death within 6 months. The terminal illness must be diagnosed and confirmed by medical practitioners’ registered with the Indian Medical Association and approved by the Company. The Company reserves the right for independent assessment.
# On diagnosis of Permanent Disability (PD) due to an accident, the future premiums under your policy for all benefits are waived. To know more about definitions, terms & conditions applicable for permanent disability due to accident, kindly refer sales brochure of ICICI Pru iProtect Smart.
## Accidental Death benefit (ADB) is up to ₹ 2 crores (subjected to underwriting guidelines). ADB is available in Life Plus and All in One options. In case of death due to an accident Accidental Death Benefit will be paid out in addition to Death Benefit. Accidental Death Benefit will be equal to the policy term or (80-Age at entry), whichever is lower.
$ Tax benefit of ₹ 7,800 is calculated at highest tax slab rate of 31.2% (including Cess excluding surcharge) on health premium u/s 80D of ₹ 25,000. Tax benefits under the policy are subject to conditions under Section 80D, 10(10D), 115BAC and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for more details.
ICICI Pru Signature UIN 105L177V03
ICICI Pru iProtect Smart UIN 105N151V06