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All you need to know about Term Insurance Plans for Housewives

dateKnowledge Centre Team dateDecember 06, 2020 views234 Views
All you need to know about Term Insurance Plans for Housewives

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. Only 50% of the women have term insurance, as opposed to 72% of men. The reason behind the difference is that term insurance is still considered to be the responsibility of the bread-winner of the family, and in most Indian families, it is the man.

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. As per Krishna Tirath, day-care for two kids amounts to around a monetary value of INR 12,000 per month.

Putting the amount of work done by housewives in monetary terms is necessary as it makes it clear why getting 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 get 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.

Why Get a term Insurance Plan?

The first thing to address will be the importance of term insurance plans. 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.

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.

Here are the key features of the life term insurance plan that make it necessary for the financial security of you and your family.

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.

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.

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.

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.

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.

Why Should You Get 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. Not only are you safeguarding your complete family, but it can also be a great way to save money for the future.

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.

Manage the House

Managing a house is a full-time job. From cooking to laundry, housewives manage it all. In today’s economy, if you were to employ a maid or helper that will take care of all the chores, you might need to spend around INR 20,000.

Well-Being of Kids

If the mother meets an unexpected death, child care becomes one of the biggest concerns for the family. Not only the child is now in need of an external source of nutrients, but also, they require 24-hours of attention, irrespective of the time.

First Teacher

Before joining pre-school, a kid learns the most skills, including languages from their mother. If the mother is not present to provide and teach those skills to the students, then the cost of a tutor will also be needed to be covered.

Which Term Insurance Plan is the Best 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.

Endowment.

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.

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.

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.

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.

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

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.

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Frequently Asked Questions (FAQs) for Term Insurance

This being a term plan doesn't offer any payout after maturity or expiration date.

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 70 years of age.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly.

If your key purpose is to give your Family financial protection, go for the term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, a term plan pays a part of the sum insured to treat your disease.

Term insurance riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term policy remains active until the expiration date.
  • Income Rider: The rider ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to ask while buying Term Insurance?

  1. 1. Amount of premium you have to pay based on your age, habits, education, and monthly income
  2. 2. The total number of benefits covered in the term plan. Do they include benefits that you care about the most?
  3. 3. How to save money on tax if you pay for the term plan?
  4. 4. Do they offer regular income options?
  5. 5. Can you change the coverage and premium in the future?
  6. 6. Does the claim consider valid if death occurs outside India?
  7. 7. Which kind of death is not covered by insurance?
  8. 8. Can NRIs take term insurance? If yes, what are the conditions?
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