Term Insurance Plans for Housewives: All You Need to Know

Written by : Knowledge Centre Team

2020-12-06

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It is a common misconception that term insurance plans are targeted towards or are only accessible to the people who have a steady flow of earnings. The work done by housewives, approximately an average of 6 hours a day, is unpaid. Though, many economists believe that their contribution should be added and calculated as a part of the national income. The situation of women to men ratio who have term insurance plans is not much better in metro cities as one would expect.

Once you try to monetize the amount of work that is done by homemakers all over India, you will realize that homemakers earn as much as a normal salaried person. Putting the amount of work done by housewives in monetary terms is necessary as it makes it clear why buying a term insurance for housewives is necessary. They put in a lot of effort to ensure that their children’s growth happens in the best way possible. The effort will be lost after their demise. Though, with a term insurance plan, the loss can be tried to be fulfilled through coverage of the policy.

When you buy a term insurance plan for your stay-at-home wife, you ensure that even if she meets a premature death or is met with an accident that results in disability, the needs of your children are fulfilled without any compromise. The term insurance plan will provide financial funds for upbringing, education, and even the wedding of the child.

Five Reasons you should Buy a Term Insurance Plan for a Housewife

It has been accepted worldwide that the work done by housewives is mostly overlooked and underplayed. You can realize the dire need of them if they were to disappear suddenly, leaving all the chores and household responsibilities on the rest of the family. To make sure that even in their absence, your family is well taken care of and is never left in need of anything, getting a term insurance plan is the best way. If you are still in doubt about getting your wife a term insurance plan, you should look at the crucial tasks performed by them which make their existence essential and irreplaceable.

A life insurance plan is one in which you pay a set premium every month or yearly. The premiums are then compounded with set interest as per the terms and conditions of the policy. At the end of the term, if a claim has been made, then the beneficiary will get returns as per the policy.

1. Affordable Premiums

Life term insurance plans are as long as 30 to 35 years. The long tenure makes it possible for one to get higher coverage with affordable premiums. These premiums are usually paid yearly and do not amount to more than the financial capability of the policyholder. In fact, you can decide for yourself the amount of premium that you wish to pay.

Know what drives the term life insurance premiums up or down.

2. Protection from Loans and Debt

Life never follows a sure path. Your untimely demise can result in your family, taking up the burden of paying off any loan or debt. You can ease the financial condition of your family and ensure that they do not face any brunt while paying off the loans through the coverage provided after the end of the term.

3. Tax Benefits

Term insurance plans are exempted from tax under the Income Tax Act, 1961. By getting a term insurance plan, you can save up to as much as INT 75,000 in taxes. Also, some kinds of policies have returns that are tax-exempted as well.

4. All-Around Protection

Term insurance plans protect you from all kinds of critical situations such as disabilities, illness, income loss, etc. During these tough times, you can ensure that your family does not face any financial need.

5. Flexible Coverage

You can opt for coverage that meets the requirements of your family. Most life insurance providers give the option of lifetime coverage for up to 99 years, known as whole life insurance. The coverage of the plan can be decided as per the financial needs of the policyholder. You can opt for a lump-sum payment or for a regular payment that resembles a salary.

Three Benefits that Women Can Avail While Getting a Term Insurance Plan

Various insurance-providers have various benefits for women who wish to get a term insurance plan. These benefits are provided to encourage more women into buying a plan and securing their future. Through these benefits, you can avail the option of higher returns or coverage at minimal premiums. Some of the benefits are listed below.

1. Women get special premium rates. These rates are decided to keep the wage difference and financial imbalance that women face in society. You can find such options in most insurance companies.

2. For maintaining a healthy lifestyle and avoiding habits such as smoking, you can avail yourself of health benefits offered under most term insurance plans.

3. Women are more prone to diseases such as breast cancer, etc. Through term insurance plans, they can safeguard their future during any such disease. Also, illness riders get additional benefits to the term plan.

Other Life Insurance Plans Available for Housewives

You will first need to assess and calculate the financial needs of your family and how much premium can be paid yearly to cover the housewife. Your current income, near-future financial needs, as well as the funds that will be sufficient for the family in case of the abrupt demise of your spouse. There are not many options for term insurance available or offered for housewives. The factor that they are not active income-earners plays a significant role in the reluctance of insurance-providers to make plans and policies available for housewives.

Here are some of the options you can pick from to ensure the financial safety of your spouse and your family. Consider them as an alternative option for savings.

1. Endowment Plan

An endowment policy is not much different from a term insurance policy. Under it, the policyholder can save a specific amount of money over a pre-defined duration. Once the plan has matured, they can receive their savings in a lump-sum amount. One can get the returns in case of the death of the policyholder or when the term reaches its end. The returns can be used for substantial financial needs such as a wedding, education, etc.

Learn when is the right time to buy an endowment plan.

2. Money-Back Plans

In money back plans, the policyholder gets a specific percentage of the sum assured to them at regular intervals. These can be set to be monthly so that one can get a salary like payment. The plan does not allow a lump-sum payment of the sum. The plan is best for those who wish to have an insurance plan and still maintain liquidity in case of a financial crisis.

3. ULIP

Unit Linked Insurance Plan, or commonly known as ULIP, can work as a combination of insurance and investment plan. You can opt to invest a portion of your sum into the market to gain profit or have a side income. The other portion of the sum goes into the insurance and safety of the policyholder and beneficiary.

You will find numerous options around you for term insurance plans for housewives. You should compare these options and consider all possible situations and factors. Housewives play a considerable role in our households to make our life easier. Their future, along with the well-being of the family in case of their demise, can be protected through a term insurance plan designed for housewives.