How does a term insurance plan for single women work?
An unfortunate passing of a family member is a financial loss too. A term insurance plan[1] is designed to act as a monetary cushion for the family if the life assured is no more. If the insured dies untimely within the policy term, a sum assured as a death benefit is paid to the family, which may help them cope. In today’s world, many single women take on financial responsibilities for their family. On the same lines, many insurers offer term plans[2] for single women that are crafted to help them create a safety net for their parents, siblings or children in their absence through a comprehensive coverage.
Why do single women need term insurance plans?
Single women, like other women, may also have dependents like parents or siblings. Thus, safeguarding their financial future is often a priority. Even if there are no dependents, a single woman can also choose to take care of her own finances in case of critical or terminal illness. In both cases, a term plan may offer a solution. Here’s why2 a single woman might need it.
Monetary support:
A term plan for single women may help them create a financial backup for parents, siblings, adopted, or even future children. A research study[3] had 16% of single women respondents who had planned and bought term plans for their potential children.
Achievement of long-term goals:
A term life insurance for single women can help them ensure all the life goals, like buying a property or parents’ or siblings future plans, are fulfilled, even if she is not there.
Financial independence:
A single and independent person may not like it if someone else bears the expenses if she has to undergo costly medical treatment or is not in a condition to work due to critical or terminal illness. A term plan for single women with a critical illness rider[3] can help to stay prepared for such situations.
Protection against debt:
Leaving behind a debt when one passes away is a burden for the family. For a single woman with a home or a car loan, term insurance with a coverage that includes that amount may rule out such possibility.
Tax benefits:
Term insurance for single women comes with tax benefits under sections 80C (in case of old tax regime) and 10(10D) of the Income Tax Act 1961. It may let the policyholder save on taxes while the death benefit will also be tax-free.
Features and Benefits of Term Insurance for Single Women
A term insurance policy for single women has its set of features and benefits that may fit the bill for potential buyers. Here’s a glimpse of the list.
Affordability:
Term insurances are relatively cheap as they have only the death benefit as the possible payout. It comes at an even lower premium for women, as their average life expectancy is 2.5% higher compared to men[2]. This makes it even more affordable to single women of different income groups.
Bigger sum assured:
Single women with dependent parents, siblings, or children have financial roles in the family. Term insurances come with a substantial sum assured that may take care of her responsibilities and family expenses if she is no more.
Comprehensive coverage:
A term insurance policy with riders opted for accidents and critical or terminal illnesses may offer comprehensive coverage in situations of crisis, adding to the lump sum payout upon death of the life assured, on payment of nominal additional premium.
Social security4:
The child of a single woman may face a bigger crisis if anything happens to the mother, as she was the sole parent. Here a term insurance payout can act as the financial security cover for the child.
What factors can affect the premiums for term plans for single women?
Gender plays a major role5 in calculations of the single women term insurance premium, making it relatively cheaper for women. This is because women are perceived to have higher life expectancy and lesser health risks compared to men. However, it’s not the only determinant. There are other general factors6 that are taken into account in the estimation of the premium. They are:
Age:
An insurance company assigns a lower premium when a single woman opts for the policy early in life. This is because at a young age, she is expected to live longer and have a healthier life.
Health:
Usually, women are believed to have a lesser risk of certain health conditions, making term plans affordable for single women.
Lifestyle and habits:
Whether a single woman follows a healthy or unhealthy lifestyle or has smoking habits is noted while deciding the premium. Risky patterns like unhealthy lifestyles and excessive smoking can lead to higher premiums.
Occupation:
A hazardous or risky profession like construction, mining, or shipping may lead to higher premium allocation.
Family medical history:
Medical history of a single woman’s family can be another crucial determinant of premiums. For example, records of hereditary diseases like diabetes in the family may lead to higher premiums.
Policy term and premium payment:
As per the general rule followed by insurance companies, lower premiums are charged for longer policy terms and annual premium payments. Premiums for half-yearly, quarterly, or monthly payment schedules are higher because of bigger administration costs associated.
Things to consider before buying term insurance for single women
There are certain [3] things to consider before choosing term insurance for single women. They are as follows:
Ability to pay premiums:
Choosing an affordable term plan for single women is necessary as she may not have anyone else to support her financially. The best term insurance for single women may be chosen based on her income, liabilities, and ability to pay the corresponding premium.
Life goals:
It’s crucial to identify the amount and tenure of coverage needed to fulfil life goals, like the single woman’s parent’s retirement, sibling’s marriage, or the child’s education, etc., in her absence.
Optional riders:
Available rider options, like coverage for accidents and critical or terminal diseases, may be carefully reviewed and chosen before buying a term insurance plan.
Correctness of information:
It’s immensely important to furnish correct information regarding health conditions, medical records, and family history. In the event of the unforeseen, this may save the nominee from possible rejection of the death claim.
Choice of the right insurer:
While buying term insurance for single women, it’s crucial to check the claim settlement ratio of the insurer beforehand. This might help nominee(s) avoid claim-related hassles.
How to buy term insurance plan for single women?
A term insurance policy is bought to financially protect the family beyond the life assured’s lifetime. With no one else to support financially, a single woman’s dependents, like her child or parents, may cope with the crisis better with such a policy in place. Hence, knowing how to buy the right term plan for single women is vital. Here’s a checklist[7]:
The amount of coverage may be sufficient to fulfil the monetary need of their dependents to sail through the crisis, carry on with the existing lifestyle, and fund life goals.
Determining the life stage is crucial for a single woman to buy the best term plan suited to her needs. Whether she plans to settle down later or desires to adopt a child should be considered while choosing coverage.
Thorough research can be useful while buying term insurance for single women. Checking and comparing the premiums, coverages, and riders may help in making the right pick.
Conclusion
Term insurance for single women may take away their worries about the dependents’ financial future. All one needs is a wise pick.
FAQs
How to Choose the Right Term Insurance for Single Women?
A right term insurance for single women can be chosen by assessing her life goals, corresponding fund requirement, the life stage, and comparing term insurance options available.
Is a term insurance plan necessary for single women?
A term insurance plan may be necessary for single women to financially safeguard her dependents in her absence.
Is a medical test required to buy a term plan for single women?
Yes, a medical test may be mandated[8] by the insurance company when you buy a term plan for single women depending upon the products and insurers terms and conditions.
How to choose the coverage amount for single women’s term plan?
The coverage amount for a single woman’s term insurance should be based on the amount needed to fund her liabilities, life goals and smooth-sailing of her dependents if she’s no more.
What are the eligibility criteria to purchase a term plan for single women?
The eligibility criteria[8] for term insurance for single women in India are:
How to calculate the premium for a term insurance plan for single women?
The premium for term insurance for single women is calculated[9] based on their age, nature and amount of coverage, income, occupation, medical and family history, lifestyle, and habits.
Can I buy multiple term insurance policies as a single woman?
Single women can buy multiple term insurance policies[9] as long as she can afford the premiums.
What are the premium payment options for a term insurance plan for single women?
The premium payment options[10] for a term insurance plan for single women are single premium,limited pay and regular pay.
What are the documents required for buying a term plan for single women?
The documents[8] required for buying a term plan for single women are: identity proof, age proof,address proof, income proof, medical records and current photograph.
References:
An ISO 9001:2015 
