Understanding Term Insurance Plan for Housewife in India

Understanding Term Insurance for Housewife in India

The most significant person who completes a family’s existence is the housewife. To make the house a peaceful, happy place to live, she takes care of its financial and other needs. Even if she might not be a contributing member, she is in charge of several tasks that make life at home more difficult for all of the members without her. For everyone, the effect may cause emotional and financial upheavals. She is therefore considered to be just as important as a family member who works.

Even though it can be emotionally overwhelming to think of her being gone, the family needs to be aware of any financial difficulties that could arise and have a strategy in place to handle them. In this sense, housewife term insurance is the ideal choice.

What is a Housewife Term Insurance policy?

Housewife term insurance is a specialized life insurance plan crafted to provide financial protection to the family in case of the untimely demise of the housewife during the policy’s term. These insurance plans usually offer a predetermined sum assured to the nominee or beneficiaries.

A notable advantage of Term Insurance for housewives is the provision of a relatively high sum assured at an affordable premium rate. This ensures that, in the unfortunate event of the housewife’s passing, the family receives substantial financial support to navigate the economic challenges that may arise.

Crucially, the death benefit provided by your insurance policy enables your family to sustain essential expenses, covering areas such as groceries, school or college fees, and settling outstanding amounts like debts or mortgages.

How Does Term Insurance for Housewife Work?

In the Indian insurance market, housewives’ term insurance is a relatively new idea. It was presented in light of the mental and physical toil a homemaker performs on behalf of her family. A housewife makes everything easier for the family by cooking, taking care of the household, and managing everyday tasks. Her absence causes the family’s daily routines to be disrupted, and they may need to employ nannies, cooks, and housekeepers to help out, which can put a financial strain on the family.

Insurance companies developed term insurance plans specifically designed for housewives with this in mind. There are several qualifying requirements for housewives purchasing term insurance, as it cannot be purchased by someone without a source of income. So let’s dig deep.

  • Qualification of the housewife

For a housewife to be eligible for benefits under a term plan, she must have finished at least graduation.

  • Income of the husband

Given that a housewife does not function as an earner, housewife term insurance is provided by taking her husband’s salary into account. To buy a housewife term plan, the husband’s yearly income must be at least Rs. 5 lakhs.

  • Payment of premiums

On behalf of the homemaker, the husband pays the premiums for the term insurance policy.

  • Choosing the nominee

The spouse is not required to be nominated even though he is qualified to pay the premiums for the housewife’s term insurance policy. Any member of the family may be nominated by the housewife for her term insurance policy.

Salient Features and Benefits of Housewife Term Insurance

Here are the key features and benefits of Housewife term insurance. 

  • Financial Security

Despite not making any financial contributions to the household, a housewife is nonetheless very valuable to the family. Term insurance for housewives can assist in guaranteeing financial stability by providing a payout that can support your family in times of need. Therefore, in the tragic event that the housewife passes away, your loved ones may be able to handle financial difficulties and cover essential future costs with the assistance of this benefit amount.

  • Affordable Premiums

Plans for term insurance are less expensive and more cost-effective. Term plans have inexpensive premiums and a large life insurance coverage. Additionally, as rates tend to rise with age, the earlier you purchase a term insurance policy, the lower the premium cost will be.

  • High Life Cover

High-sum assured amounts are available at extremely cheap premium rates. This is mostly because a term plan is an investment-free protection policy. When a nominee passes away within the policy’s term, the entire premium amount is invested toward a life insurance policy that will pay out to them.

  • Option to Add Riders

The option to add a rider or add-on covers is typically given to the insured because the insurance policy or plan they purchase may not contain all they need. Although an extra feature not previously covered by the insurance policy could be covered, the fundamental plan would stay the same. Critical illness riders, term riders, childcare benefits, and other riders are among those that can be added. 

A critical sickness will assist the insured financially in managing the illness and allow them to fully concentrate on recuperating, especially with the rising number of diseases that affect women, including PCOS, PCOD, breast cancer, and other conditions.

  • Tax benefits

Section 80C of the Income Tax Act allows you to deduct any premium payments you make for your Housewife’s Term Life Insurance policy from your taxes. These tax benefits are available to you and your family in conjunction with your term life insurance policy. One and a half lakh rupees can be deducted from taxes each year, subject to the relevant rules and circumstances.

Types of Term Insurance Plans for Housewife in India

There are several sorts of term insurance plans for housewives that are tailored to meet the specific financial requirements of individual households.

  • Level Premium Term Insurance

The premium for this kind of term insurance doesn’t change throughout the policy. It is unaffected by aging or other relevant variables. This sturdy, high-quality premium structure offers peace of mind. 

  • Increasing Term Insurance

Upon reaching major life milestones, the sum assured and the corresponding premium of a rising term insurance plan tailored for housewives increase. These climbs usually take place when housewives become parents, make plans for their kids’ college education, or deal with other life-altering situations.

  • Decreasing Term Insurance

The policyholder in a declining term insurance plan might choose to reduce the sum assured following changing family needs. For example, the amount guaranteed can be lowered if the kids are debt-free and prepared to handle the family’s financial obligations. This change results in cheaper premiums.

  • Term Insurance with the Return of Premium

Purchasing term insurance with premium return is a good option for housewives who want to secure their financial future while also saving for the future. This plan provides the possibility, according to the terms and circumstances of the policy, of receiving a maturity benefit of a return of the premiums paid for the term insurance policy.

How To Choose the Best Term Insurance for Housewife?

The following are the things to consider when choosing the best term insurance for a housewife.

  • Ensure that you opt for an Adequate Cover

Selecting a cover that isn’t sufficient to fulfill your budget is the last thing you should do. Consequently, it’s critical to choose a term insurance plan for housewives that provides the necessary financial coverage. Examining your financial plans is extremely recommended to make sure of that. Recognize how much you have saved and how much more you require. 

Track your current spending and project your future spending at the same time. Choose a suitable coverage quantity in accordance. As a general guideline, the cover amount should be three to five times the spouse’s yearly income.

  • Claim Settlement Ratio

A consideration before purchasing term insurance is the claim settlement ratio. It is computed by dividing the total number of insurance claims paid by the insurer by the total number of claims received. Selecting a reputable insurance company with a high claim settlement ratio and an easy-to-use claim settlement process is recommended.

  • Consider the Type of Term Plan

Three different kinds of term plans are available: Return of Premium, Decreasing Term Insurance, and Increasing Term Insurance. Since these plans have varying characteristics, you must select the one that best meets your needs and financial objectives.

Frequently Asked Questions

You can get a Housewife Term Life Insurance coverage on your own. The policy can be purchased alone or as a policy with a joint term cover. When you and your spouse own a combined term insurance policy, ownership is shared equally.

No, if you choose a term plan with spouse coverage, it does not matter what the second spouse’s job status is.

Proof of income must be provided by the policyholder to purchase a term plan. As a result, someone who does not receive pay could not be able to purchase a term plan. For a spouse who is not employed, term insurance is nevertheless available in India. To provide an additional layer of financial security for your family in times of need, the majority of insurance firms offer spouse cover in term insurance.

Yes, if optional riders are selected, accidental coverage may be provided by housewife term life insurance. However, the policyholder can use the accidental death add-on rider to augment the death benefit in the event of an accident. If an accident results in the policyholder’s untimely death, the rider will supply extra money.

A husband and wife can be covered by the same term insurance policy. It is often known as a joint-term insurance plan.

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