Homemakers in the family are like a PCB board in your computer, least highlighted but behind everyone’s stability and connection. Yet, their financial dependence put them in a very delicate financial position. Even if they are handling the family finances and running the budget, they are rarely thinking about themselves.
This is not limited to a few families or just rural or urban groups; insurance studies have pointed out that while women are prone to similar health risks, they often do not have health insurance to take care of the expenses.
Read on to find how life insurance cover helps homemakers and their family –
Economic Value of a Homemaker
Research worldwide has suggested that the presence of stay at home spouse or mother is what makes a family economically and socially stable. Mothers are often responsible for setting and maintaining the rules to keep the family healthy and going.
Stay at home mothers perhaps has the highest economic value for the family and society. Their value in raising and wellbeing of children and their development is uncontested. Since, emotional connections are hard to put in numbers, giving an accurate economic value to the homemaker’s presence it difficult.
However, if you are to put a number to the economic value of your homemaker spouse, you can still do so by the replacement method. For instance, what are all the expenses you will need to bear in case the homemaker is absent from the family?
Image 1 gives an approximate picture of urban household expenses for a month. So, if your total income is close to Rs. 1 lakh, your homemaker spouse would be worth at least close to Rs. 27,000.
Human Life Value of a Homemaker
Where there is economic value, there is a human life value. Human life value refers to the concept of life insurance cover, where you need to have an insurable financial value for the proposer. A person with low financial value (or human life value) cannot buy a life insurance cover.
Once you have determined the economic value of a person, calculating human life value is easy. We simply need to divide the annual economic value with the safe rate of interest available in the market.
For example, long-term safe rate of interest in India is 6% p.a. So, if you divide Rs. 3,24,000 with 6%, you get the human life value of your homemaker at Rs. 54 lakhs.
This is the amount of money that can help you keep your family afloat in case anything happens to the homemaker.
Protection against Critical Illnesses
It should not be a surprise for you to know that your homemaker is exposed to almost all the critical diseases as you are. Further, if she is diagnosed with one of these diseases the financial burden of treatment and recovery will affect the family finances, although the impact could be less than the case where you are affected.
The reason is, if you are affected as breadwinner, the family’s income will be affected. However, that’s not the case with the homemaker. Thus, she may not need as large a financial backup as you will.
But she will still need a reasonable amount given the cost of treatment for some of these diseases.
How Much & How to Get the Life Cover for the Homemaker?
The best option is to go for a co-insurance policy. For instance, the iSelect Star term plan from Canara HSBC OBC Life that covers your spouse under the same policy, along with offering discounts on the premiums for spouse.
However, you can still select a separate life cover for your spouse. The cover for homemaker would be a maximum 25% of your own life cover under the policy. However, if your spouse has an income, you can get an even higher amount of cover.
Buy a term insurance online
Also, for better convenient for them and the family buy the online term insurance cover. Online term insurance plans provide certain advantages like:
A regular Life Insurance is not enough
In these unprecedented times, a simple life insurance plan is not enough. Be it a working individual or a homemaker, everyone needs a cushion against unseen situations. Therefore, a terminal illness cover comes handy and ensures greater coverage.
Remember, the circuit of the family will work only as well as its PCB. So, make sure to take care of the spouse who’s taking care of everyone else in the family.
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