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Your private key is like a password, and so it should only be accessible by YOU. Changing the permissions in Linux to 400 is recommended because it makes the private key file readable by you ONLY. In Windows, the equivalent would be removing all permissions from the private key, disabling inheritance, and giving yourself read permissions.
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thank you for your answer. So all chmod does is prevent other users on the same machine from accessing the .pem file correct? It does not improve the security of the ssh connection itself, right?
That correct, the ssh protocol/session is still encrypted and functions the same way.