Why Women Should Buy A Term Life Cover

When it comes to financial planning, term life insurance is the foremost tool in securing your future. In a term plan, insurance coverage is offered as a death benefit. The policyholder pays a premium against a sum assured for a chosen tenure. If the policyholder dies within the policy tenure, the nominee/beneficiary gets the sum assured as a death benefit. The death benefit is the sum assured payable by the insurer to the nominee/beneficiary of the insured.

The nominee is the person whom the policyholder will nominate for receiving the sum assured after the death of the policyholder. The nominee could be the wife, child, or parents of the policyholder. He/she needs to claim term insurance after the demise of the policyholder.

One of the prime methods for securing complete financial protection for your family during unforeseen circumstances is term life insurance. Sadly, the penetration of term insurance among women is extremely low in India. It is essential to create awareness among women to get themselves insured in order to prepare for the uncertainties of life.

With the rising number of working women in India, it is extremely important to educate them about insurance as they look at jointly securing their family's future. Women have now become equal stakeholders in financial planning for the household.

Homemakers should also buy a term life cover because they also play a central role in household finances. It isn’t uncommon for women to be called ‘money managers’ of the house. Not just managing the finances, taking care of the entire household is a full-time job in itself. From that perspective, term life insurance is also equally important for a homemaker.

They can buy a joint-life policy in which both husband and wife are covered. On the death of the husband, 100% sum assured will be given to the dependent and on the death of the wife, a partial sum assured is given to the dependent. The maximum cover for a non-working woman can be Rs 25 lacs.

You can also buy Saral Jeevan Bima as standard income documents are not needed for this policy. Car or two-wheeler’s RC can be easily considered as income proof for buying Saral Jeevan Bima. Having a term life cover is crucial for single mothers with dependent children. This not only ensures that her finances stay secure for her loved ones, but also offers a guaranteed solution towards leading a stress-free life without having to worry about the capital resources for her family.

Advantages of having a term cover
The earlier you buy a term life insurance policy, the more affordable it is. The premium for term life insurance increases with age, so it's best to start as early as you can. Another advantage is that your premium stays locked for a lifetime once you purchase your term insurance plan.

Term life insurance is one of the cheapest financial instruments available in the market that provides protection against risks such as death, disease, and disability. Moreover, there are add-ons for loss of income due to disability and critical illnesses at an added cost.

Choosing the right cover amount
The cover amount should be at least 10 times your annual income. If you are younger (less than 35 years of age), you should buy a cover that is 20 times your annual income. The duration of your term life insurance policy depends on the number of years you will earn. You should choose the duration of your cover depending on your retirement age. There is no harm in choosing a longer cover since life expectancy has gone up.

Women are realizing the importance of having term life insurance
These days, more and more women are becoming financially liberated and emerging as equal participants in resource building in families. The role of women in the workforce has also become equal to men and they have become partners in financial contribution and all related economic activities.

With consistent consumer awareness initiatives, more and more women are realizing the importance of buying a term life cover. According to the IRDAI report, the number of life insurance policies bought by women in FY 2020 was 92 lacs.
Term life policies bought by women coming onto Policybazaar website in the 31-40-year age group was 50 percent in FY20-21, whereas the share for the age bracket of 41-50 years was 18 percent.

“In 2020, out of all the female customers coming onto Policybazaar website, 52 percent women invested in a term life cover with a sum assured of Rs 50 lacs and above, while the remaining 40 percent invested in a cover of Rs 1 crore and above,” says Santosh Agarwal, Chief Business Officer for Life Insurance at Policybazaar.com.