Everything You Need to Know About Term Insurance for Women

Term insurance for women can be described as an insurance plan that offers the insured life coverage for a pre-fixed time. Both working and housewives must get term insurance to secure their financial future. Notably, the term insurance plans for women accompany a relatively lower premium when compared to insurance policies bought for men. This is because men are more prone to get inflicted with health issues and have lower life expectancy compared to females. 

That said, let us proceed to check what is a term insurance plan for women and more about its key aspects.

What is Term Insurance for Women?

Typically, a term insurance plan for women is coverage that extends a death benefit to their family due to sudden death during the term plan’s tenure. Like discussed the premiums for these plans are 30% more affordable than those availed by male policy buyers.

Typically, a term insurance plan for women offer extensive coverage at lower premium amounts. Additionally, the payout from the term plans comes in handy to maintain the family’s standard of living and account for financial liabilities with much ease. It can also help the policyholder’s family to meet long-term goals such as funding the child’s higher education and wedding. 

Should Women Get Term Insurance Plans?

Women must consider purchasing a term insurance plan if they wish to safeguard the financial future of their family even in their absence. Such a policy plan is also crucial for those individuals who are susceptible to chronic health issues and have a considerable financial liability to account for.

Here are a few key components that make having a term insurance policy so important –

  • Ensures financial independence of the insured’s family

In case of the sudden death of the insured woman, the policy provider will pay a sum assured to the policy nominee. The purpose of such monetary compensation is to safeguard the financial future of the insured’s family even in their absence. 

The sum assured serves as a financial safety net for the family by allowing them to account for their daily expenses and future obligations without dipping into their savings. This comes in handy for those families, where the insured woman was the sole breadwinner. 

  • Helps mobilize savings

In case of life insurance policies with term return of premium (TROP), the insured woman is entitled to receive a lump sum amount if she outlives the policy term. Notably, such an amount is actually the aggregation of the total premium paid during the course of the life insurance policy. Such a feature allows the insured woman to build a corpus mobilizing a part of their income and also helps form a disciplined approach towards savings. 

  • Facilitates tax savings

Tax planning is a crucial component of financial planning, which makes it mandatory for all working women to put efforts into the same. While paying taxes on earnings beyond a certain income slab is mandatory, individuals do get the option to save on taxes if they plan their investments and savings better. For instance, purchasing an insurance policy is a proven way of availing tax returns. 

To elaborate, in Section 80C of the Income Tax Act of India, the insurance premium one pays towards a term plan is exempted from any taxes. Additionally, the death benefit paid to the nominee is tax-free under Section 10(D). These tax benefits make term insurance plans ideal for women taxpayers. 

Features of Term Insurance Plan

Here are the key features of effective term insurance for women

Financial Protection for your family: The sum assured received by the nominee of the policy can help the loved ones of the insured to meet the financial obligations of their family without straining their savings. Such a facility ensures the financial safety of the insured even in their absence and helps their family become financially independent. 

Lower premiums: Women policy buyers are eligible to get a life insurance policy at a lower premium amount than. Their annual premium liability is up to 30% more than that for men. This is due to the longer life expectancy of women and the lower health scares compared to men. 

Education cover: Some term plans provide women policy buyers with child cover. Such a cover comes in handy to account for the education expense of the child in the event of the sudden death of the insured woman. The cover amount helps to meet the education and other expenses of the children with ease. 

Rider benefits: Women policyholders can increase their policy coverage by adding riders to their existing base plan at a very nominal fee. Such riders serve as add-ons that help to customize the coverage as per the policyholder’s needs and requirements. Some of the most popular riders include critical illness cover, accidental death benefit, and the waiver of premium riders. 

A critical illness cover is undoubtedly the most important rider for insurance buyers. This is because such an add-on increases coverage against several critical illnesses including heart attack, kidney failure, stroke, liver disease, lung disorders, and more. In the event of diagnosis of any of the listed chronic diseases, the insurance company pays the rider sum assured to help the insured account for the cost of treatment and related hospitalization costs. 

Covers women-specific cancers: Typically, a term insurance policy with a critical illness rider covers a variety of cancer. The fact more women are being rapidly diagnosed with cancer than men makes such an add-on even more crucial. Many insurance companies offer critical illness add-ons that cover women-specific cancers like cervical, ovarian, and breast cancer. The coverage allows insured women to seek treatment and account for medical expenses without straining their savings. 

Ensures financial independence post-retirement: The payout from a TRIP or 100% premium refund through a no-cost term plan proves useful in helping women secure their financial future, especially after retirement. The money received helps individuals account for their daily expenses and liabilities without any hiccups or dipping into their savings. This ensures that they are financially independent post-retirement. 

These features and benefits make a term insurance policy for women so important. However, it is recommended that individuals compare the terms and exclusions of different term insurance policies for women to pick a plan that’s most suitable for their requirements.