How Does Term Insurance for Women Work?
Term insurance can be obtained in the form of an insurance policy. This policy provides a death benefit to the family if the insured person were to pass away due to unforeseen circumstances. The death benefit is valid for a certain specified period, which is the policy term. Irrespective of the gender of the policyholder and the life assured, term insurance plans work in a largely similar fashion.
The key focus of a term plan for women is life coverage. When you buy a term plan for women, you are getting financial security for future uncertainties for the survivor of the life assured. Given the design of these plans, they tend to come at a cost rather lower when compared to other types of life insurance coverages.
For example, if you use respective premium calculators, you may find that the premium for a ₹2 crore term insurance policy is slightly lower than the same sum assured and term duration for a plan such as ULIP.
It is also important to keep in mind that level term insurance plans rarely offer any additional core benefits and can be enhanced through options such as riders. You can use a term insurance calculator to get premium estimates based on specifications such as age, sum assured, term duration, and more. You can then make the plan purchase online or offline, based on your convenience and the available options. If any of the events covered by the policy are to occur in the future, your nominee can initiate a claim and receive the benefits.
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Why Should Women Get Term Life Insurance?
A primary motivation for anyone to get term life insurance can be the assurance of financial safety of their loved ones in the future. Here are some reasons why women should get life coverage with term insurance plans.
One of the simplest reasons why almost all adults, and especially women, should get a term plan is to alleviate their worries about the future. Many of the term plans for women can be customised with riders such as accidental disability benefit and waiver of premium. This allows you to have a sense of security when facing uncertainties.
Financial security for dependents
If you have dependents, such as children, parents, siblings, or spouse, the right term plan choice with the right sum assured can help you build financial security for them for a future where you are no more. This allows them to be more self-reliant through the benefits offered by the term insurance.
If you have any form of debt, in the event of your passing, it will likely be passed on to your next of kin. To protect them from this burden without affecting the assets you pass on to them, term insurance can be of use.
For a taxpayer in India under the old regime, the premiums paid for your term insurance plan could earn an exemption. Moreover, if your nominee were to claim a benefit, they may also be able to claim tax benefits.
Of all the life insurance plans women in the country can opt for, term insurance for women emerges as an ideal option due to its straightforward approach and cost-effective structure. Whether you are a working woman wanting a high sum assured, like a ₹1 crore term insurance, or someone looking for affordable coverage, term insurance may be the choice for you.
What Should You Consider When Buying Term Insurance for Women?
Term life insurance is a significant commitment with the potential to have serious effects on your family. Here are a few things women should consider when buying term life insurance for themselves.
Choosing the right policy
While it is neither necessary nor entirely common, there are specific term insurance plans aimed towards women, which you can choose from. You may also opt for regular term plans that are accessible to everyone. In either case, choose a policy after considering your requirements and the available options.
The duration of the coverage is a significant choice not only because it affects the premium amount but also because it dictates how long you will have the coverage. Choose a duration based on what is suitable for you.
A common assumption for term insurance sum assured is for it to be a value 10 times your annual income and any liabilities you may be leaving behind. For example, if such a calculation brings you to the conclusion that ₹1.5 crore term insurance is right for you, you may use an online premium calculator to figure out if it actually fits your budget.
This ratio is a consideration affecting the experience your nominee or beneficiaries may have with the policy. Claim settlement ratio is a value considered to be an indicator of how likely the insurer is of successfully settling the claim. It is considered ideal to choose an insurance provider with a high claim settlement ratio.
Types of Term Insurance for Women
When exploring term insurance for women, it's crucial to find a plan meeting your specific needs and financial goals.
Consider these available term insurance plan variants to find the one suiting you best.
Level Term Insurance Plans
These plans provide a sum assured to your beneficiaries if you pass away during the policy term. It’s a straightforward option offering essential financial protection without any additional benefits at the end of the term.
Term Insurance with Return of Premium (TROP)
With TROP, you not only get coverage but also the assurance that all the premiums paid will be returned to you if you outlive the policy term. This plan is ideal for women wanting both - protection and a savings component.
Joint Term Insurance Cover
For women seeking life coverage alongside their partner, a joint term insurance plan is a great option. In the event of either partner’s death, the surviving spouse receives the sum assured. This plan offers comprehensive coverage for both individuals in the household.
Increasing Term Life Insurance Plan
This plan ensures that your coverage increases annually, helping you keep pace with inflation and evolving financial responsibilities. It’s a smart choice for women anticipating growing financial obligations in the future.
Decreasing Term Life Insurance Plan
If you expect your financial responsibilities to decrease over time, such as paying off a mortgage, a decreasing term life insurance plan might be suitable. This plan provides a guaranteed coverage amount that reduces at a predetermined rate, aligning with your diminishing needs.
Who Should Be Covered By Term Insurance For Women?
Term insurance is essential for nearly all women looking to secure their family’s financial future. While their contribution to their families may not always be financial, they undoubtedly play a key role in the lives of their loved ones.
The number of women buying life insurance today is in no way insignificant. According to the IRDAI annual report for 2022-23, women in India were issued about 97.38 lakh life insurance policies. This share amounts to about 34.2% of the total sales in the sector, which was approximately 2.84 crore life insurance plans. Thus, there is a greater awareness of the importance of life coverage for everyone, irrespective of their gender.
Here are some examples of who should consider availing of term insurance for women.
Self-employed women – they have to deal with irregular income. This makes term insurance crucial for financial stability and ensuring business continuity by covering debts and expenses.
Salaried women- they should take safeguards against uncertainties such as pandemics or layoffs by securing their family’s future with a term insurance policy.
Housewives – they contribute significantly to the household, and their absence would financially burden the family due to additional costs for the duties and services they handled. Term insurance can alleviate this financial strain.
Single mothers – they carry the dual responsibility of emotional and financial support. Term insurance is vital to ensure their dependents’ future is secure, providing necessary financial assistance in case of the mother’s passing.
Worried about whether you will be able to afford a term insurance plan? Check out our online term insurance calculator to understand the premium amount for the coverage you seek.
Differences Between Term Insurance for Women and Men
The term life insurance policies that can be purchased for men can also be purchased for women. At a fundamental level, there is not much of a difference between policy features based on the gender of the life assured. However, policy details such as premium amount may change for women. Generally, women are considered to have a higher life expectancy as compared to men, possibly leading to lower premium rates for them. It is ideal to get estimates with a term insurance calculator if you want to compare premium rates.
Furthermore, more specific circumstances that are exclusive to women, such as pregnancy complications, may be covered by the policy, especially if riders are included. This may vary across policies; hence, it is ideal to check with your insurance provider.
Frequently Asked Questions (FAQs)
At what age should women buy term insurance?
Women can start buying term insurance as early as 18 years of age, provided they meet the eligibility criteria and are able to fit it into their financial plans. It is recommended to buy term plans earlier in life as it may help with getting lower premium rates.
How much term insurance coverage do women need?
The sum assured you need may vary based on your unique circumstances. A common method to calculate an ideal sum assured is {(Your Annual Income x 10) + liabilities}. You may use a Human Life Value calculator to get these estimates or consult a financial expert.
Does term insurance for women cover all types of cancer?
Term insurance plans are built on life coverage rather than health insurance. The passing of the life assured due to cancer may be covered under these plans. If a critical illness rider is included, check the list of critical illnesses covered under the rider.
Should I buy term insurance for my wife?
Your wife, whether an earning member of the family or not, probably plays an important role in your life as well as that of your family members. It may be suitable for you to get life coverage for her to ensure that your family is well taken care of.
How can women save money on term insurance premiums?
One of the easiest ways to ensure a lower premium is buying a policy early in life. Furthermore, a healthy lifestyle can also help you get lower premiums.