What is Term Insurance for a Housewife?
Term insurance plan, one of the most basic versions of life insurance, is a policy almost anyone can buy for themselves or one of their loved ones. In the simplest of words, term insurance involves securing an individual with a fixed amount (sum assured) that can be claimed upon the passing away of the same individual. Buying term insurance for a housewife involves choosing the best plan available for the right sum assured and including all the necessary add-ons.
Importance of Term Insurance for Housewives
Term plans, or life insurance plans in general, are commonly treated as an obvious choice for individuals who are primary earners in a family, or have dependents such as parents, children, or spouses, who rely on them financially. However, contributing to a family system cannot be measured in income alone.
Thus, it is hard to imagine the void that is left behind if something unfortunate were to happen to this contributing member of the family. While her absence cannot be fulfilled, financial support after she is no more can help the members take care of their needs.
Here are a few reasons why term insurance plans for a housewife should be considered.
The individuals the housewife is survived by can rely on the death benefit from the term insurance to take care of themselves.
Planning her children’s future
After their mother is gone, the next of kin could use the sum assured to plan the future of her children or fund their education.
Support for medical emergencies
If the term plan is purchased with riders such as accidental permanent disability or critical illness rider, the benefit claimed can be used for her unforeseen medical needs or any sudden developments covered by such add-ons to the plan.
Is ₹1 crore the right sum assured for a term plan for a housewife? Discover plans that are right for your needs. Click here to know more.
Key Features of Term Insurance for Housewives
Usually, term insurance plans for housewives are the same as plans you may buy for anyone else. Here are some of the key features you can expect from this type of life insurance plan.
Term plans are considered to offer one of the best premium-to-coverage ratio. You can expect to get the desired sum assured at a relatively affordable cost. You may also use a term insurance calculator to understand the premium rates for your desired plan.
At its core, term insurance plans offer only a life cover component. While there are no other returns or benefits to be expected from a level term plan, which is the most basic version of these plans, there are other plan variants that may offer some basic benefits.
To improve the scope of your term insurance plan for housewives, you can check for riders available with the plan. Some of the common ones include waiver of premium, accidental death benefit, accidental total and permanent disability, and income benefit. These are optional and their cost can alter your total premium.
What Benefits do Term Plans for Housewives Offer?
If you consider term insurance plans for housewives to be too simple to offer any real benefits, take a look at some of the benefits:
Future Security – Setting in place a life cover for a housewife means securing the future of her dependents financially. They can have fewer worries about a future without the support of their loved ones.
Choice of Duration - Term plans are usually offered for a limited duration where the time period is chosen by the policyholder from the options available. You can choose a coverage only for as long as you need to.
Returns - If you choose a return of premium option when buying a term insurance plan for a housewife, you can expect the premium amount paid back if the plan reaches maturity.
Taxation advantages - As per the prevalent tax laws, a taxpayer who has opted for the old regime can choose to avail of tax exemptions on the premiums paid. If the nominee has opted for the same regime, they could also claim exemptions on the death benefit received.
Peace of Mind - Having a life cover for a housewife allows multiple people to have peace of mind, including the life assured and their key dependents.
Types of Term Insurance Plans for Housewives
When considering term life insurance plans for housewives, know that there is a range of options available. Consider your requirements instead before choosing any plan out of the available options.
Here are some common types.
Level Term Insurance Plans
These plans offer a fixed sum assured to the nominee in case of the policyholder's demise during the policy term. It provides essential financial security without any maturity benefits.
Term Insurance with Return of Premium
Also known as TROP, these plans ensure all the premiums paid are returned to the policyholder if they survive the policy term. This plan is suitable for housewives seeking both protection and a savings component.
Joint Term Insurance Cover
If you seek a plan with dual life coverage benefit, you can opt for a joint term insurance plan. In case of the demise of either spouse, the surviving partner receives the sum assured. This plan offers comprehensive coverage for the household.
Increasing Term Life Insurance Plan
The sum assured increases annually, providing growing coverage to keep up with inflation and changing financial needs.
Decreasing Term Life Insurance Plan
Reducing term life insurance for housewives provides a guaranteed cover amount that decreases at a predetermined rate over time. It is a suitable option if you expect your financial and other responsibilities to diminish over time.
Riders Available with Term Insurance for Housewives
While they are optional and come at an additional cost, riders can help you get more out of your term insurance. For example, whether you have a ₹1 crore term insurance, or a sum assured much higher, the benefit received will be straightforward death benefit. With riders, you can expect more coverage for more possibilities.
Here are some of the common rider options to choose from.
Accidental Death Benefit Rider: Provides an extra sum assured if the policyholder dies in an accident.
Critical Illness Rider: Pays a lump sum upon diagnosis of specified critical illnesses such as cancer or heart disease.
Waiver of Premium Rider: Waives future premiums if the policyholder becomes disabled or critically ill.
Disability Income Rider: Offers a regular income if the policyholder becomes permanently disabled.
Choosing the Right Term Insurance for Housewives
The right term insurance plan should be based on your needs. Avoid simply buying the first available option you may come across.
Term plans are long-term commitments and can play a significant role in your financial planning. Choose one based on what suits you best instead of what is a more popular option.
You can start by deciding on the value of the sum assured. For example, you may think that ₹5 crore term insurance is an affordable option for you. But the coverage you need may be higher or lower. You may use a human life value calculator or consult an expert to understand this aspect better.
Next, use a term insurance premium calculator to get premium estimates for your desired sum assured. You can also check how riders alter your premium amount. Choose to add them based on your requirements and budget.
Factors to Consider Before Choosing a Term Insurance Plan for Housewives
Whether you are a housewife or someone buying a life cover for a housewife, here are a few things to keep in mind while buying term life insurance plans.
Choose an appropriate sum assured based on your needs. Whether you buy a ₹2 crore term insurance plan or a plan with the sum assured amount in lakhs, ensure that the amount is right for you.
Choose the right term duration as per your estimates of your responsibilities. For example, if you expect your children to take care of themselves in the next 15-20 years, a term duration of 20 years should suffice. However, if you have parents to look after, you may need a higher coverage.
Choose an insurance provider with a high claim settlement ratio and reliable customer service. It will help prevent any issues for your beneficiary as well as yourself.
Choosing the appropriate riders is also a crucial part of buying term insurance. Before you make the purchase, ensure that you have a clear understanding of what riders are and how they can prove beneficial.
Before you buy term insurance for housewives, use an online term insurance calculator to get estimates. It will give you the approximate premium amount for the plan you choose, thus helping you plan your finances better. Click here to experience a quick, hassle-free term insurance calculator.
Frequently Asked Questions (FAQs)
Is term insurance for housewives expensive?
Term life insurance plans are one of the most cost-effective life insurance options available in the market. The premium is usually a fraction of the sum assured. You may use an online calculator to understand what your desired plan may cost you.
Can housewives buy joint term plans with their spouses?
If you are a housewife, your spouse can get a joint term plan and add you under its life cover. However, you may not be able to make this purchase for yourself if your spouse is the earning candidate.
Can a non-salaried person buy a term plan?
Housewives may not have a steady income source, or any earnings at all. However, if they seek to get a term plan, they need income proof. For this, they may be able to use the income proof of their spouse.
What is the age limit for buying term insurance for housewives?
Eligibility criteria for buying term insurance, including age limits, are the same for housewives as they are for other customers. Since these details may vary across plans, you can check the eligibility criteria for the plan you are interested in.
What is the maximum sum assured allowed in case of a housewife?
Usually, there is no maximum limit for term life insurance sum assured. You may choose an amount appropriate for you. However, the final amount may be subject to the approval of the insurance company offering the plan.