Look beyond the gloss

Super Shakti. Silk. Bharti. No, these are not primetime television serials. These are, in fact, exclusive financial products for women offered by banks and insurance companies. But do products marketed exclusively to women really offer anything unique? What’s the catch? We take a hard look at a few of them.

Savings accounts

If you thought women’s bank accounts offered a better deal on interest rates, perish the thought. Saving accounts interests rates are today common across customers. In spite of RBI de-regulating interest rates on savings account, most public sector banks and large private banks such as SBI and ICICI Bank still offer only the standard four per cent.

Thus interest rates offer limited scope for comparison shopping. But there are other features, such as the minimum monthly balance you need to maintain, withdrawal limit and transaction charges, which you must consider. This is where banks are tweaking these products to entice women.

Banks offer many ‘special’ privileges on special women’s accounts, right from lower minimum balance and extension of withdrawal limits, to free accident cover and concessional locker rates. For instance ICICI Bank’s Advantage woman savings account offers a zero balance facility and an air accident insurance of Rs. 50,000. The women’s savings account offered by HDFC offers accidental death cover of Rs 10 lakh, and accidental hospitalisation cover of Rs 1 lakh.

There are also concessional interest rates on gold loans, personal loans and discounts on processing fees.

Fine print

In case of IDBI’s Super Shakti account for women, a zero balance account is offered for your kids (below 18 years). High withdrawal limits and discount on locker services are other features. Kotak’s Silk account for women, waives the non-maintenance charge on your child’s account, and offers discount of upto 35 per cent on locker rentals for the first year.

If a product is for women, ‘shopping’ seems to be the automatic cue word. But some of the add-ons offered here seem quite strange. Consider the huge withdrawal limits. The message seems to be- ‘If you’ve gone overboard shopping, here’s more cash’.

But if you lose your card, expect your account to be emptied out! Most accounts that offer a zero balance account also come with strings attached. They may require you to maintain a recurring deposit, failing which charges for non-maintenance are applied.

ICICI Bank requires a recurring deposit of Rs 2,000 a month to be maintained along with the savings account.

Similarly, freebies such as personal accident covers come at a minimal cost. For instance for a standalone accident insurance cover of Rs 3 lakh, the annual premium is just around Rs 800.

While HDFC Bank offers a higher accidental cover, remember that the minimum monthly balance requirement is Rs 10,000.

Thus make sure the freebies are really worth it before you take the trouble of changing your bank account.

Life insurance

New products tailor-made by insurance companies for women usually come with covers for maternity and illnesses that women are prone to, or a life policy covering the loss of your partner. Some insurers such as Bajaj Allianz customise products for women by offering special riders. The MahilaGain offered by them covers critical illness benefit, reconstructive surgery benefit due to breast cancer and complications on pregnancy.

HDFC Life Smart Woman plan, India’s first unit linked plan for women, offers benefits like waiver of premiums for three years in the case of pregnancy complications, congenital conditions, cancer or death of spouse. Additionally, you also receive your premiums for three years as cash in these cases. The policy also provides a higher premium allocation of 102.5 per cent from the 11{+t}{+h} year of the policy. This is the proportion of premiums invested to buy units.

LIC’s Jeevan Bharti - a money-back plan – offers the option of receiving maturity proceeds as an annuity. Another unique feature is the automatic cover. Even if you have stopped paying the premium after two years, you will be eligible for a life cover for an additional three years. However, most regular policies and critical illness covers exclude woman-specific needs. Hence, it may be worthwhile to look at some of these products. However, securing protection through health insurance policies may be better when it comes to illnesses specific to women.

Your main purpose in taking life insurance is usually twofold. One, is to compensate for the loss of your income in case of your death, in which case it is best to choose the plan that provides enough sum assured at the lowest cost. Two, it could be an investment tool for specific purposes such as marriage, education of your children or building yourself a snug kitty for retirement. In the latter, your real concern should be the performance of these plans (don’t forget the hidden charges). LIC’s plan is a traditional policy wherein your return may be lower than inflation. In the case of unit linked plans, it is fund performance rather than any special features that should sway your decision. After all there is nothing exclusive about losing your money.

radhika.merwin@thehindu.co.in

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