Affordable Protection: Why term insurance is ideal for women

What is term insurance, and why is a term plan ideal for women?
 

Term insurance^[1] is the most traditional form type of life insurance, where the nominee gets the sum assured as a death benefit in the event of the life assured’s death within the policy term. Available at a relatively lower premium, a term plan thus financially shields the insured’s family from unforeseen mishaps.

So why is term insurance the ideal solution for women? Experts cite the following reasons^[2].

• A term plan may act as a financial security layer for the family if the life assured is suddenly no more.
• With a cheaper premium compared to other insurance plans , a term plan may be an affordable choice to build a substantial corpus.
• The death benefit from the term insurance is a stable source of funds that may ensure fulfilment of the financial goals even in her absence.
• Acting as an economic buffer, the term plan’s lump-sum payout may take care of debts, if any, children’s education costs, and other domestic needs.
   

Benefits of a term plan for women
 

Some insurers offer term insurance plans specifically curated to suit women’s needs. Listed are the benefits of a term plan for women.
 

Financial security for family:
 

An untimely death is not just painful but can push the family into a difficult situation. Acting as a financial cushion, a term plan may help the policyholder’s kin to sail through.
 

Disability support:
 

Some term plans let policyholders choose an optional rider offering added coverage or waiver of premium for disability^[1] due to accident. This may create a source of income for the woman or save her from financial struggle if she is no longer able to work.
 

Security against loans:
 

A woman may have an ongoing home or car loan, which becomes a financial burden on the family upon her death. The term plan payout may provide a scope to repay the outstanding amount.
 

Pay off debts:
 

Suppose a family has debts, which can create a bigger trouble in times of unforeseen crisis. Here a term plan with a coverage that includes the debt amount may turn a saviour helping the bereaved pay it off.
 

Tax planning:
 

Annual premium payments for a term plan are subject to tax exemption under section 80C (in case of old tax regime) of the Income Tax Act 1961^[1]. This may aid in the tax planning of a working woman. Besides, the death benefit in the event of the unforeseen is also tax-free.
 

Term insurance features tailored for women
 

Some term plans offer features that are tailor-made for women. Here’s a glimpse.
 

Affordability^[3]:
 

Designed to pay only a death benefit, term insurance premiums are usually much cheaper compared to other insurances. In addition, even lower premiums are assigned to women as they are believed to have 2.5% higher life expectancy and lesser health risks than men. Women may thus find it an affordable choice of investment to create a large corpus.
 

Flexibility of adapting to needs^[1]:
 

Term insurance may allow women to adapt to new life roles with a stronger financial foothold. Offering features like easy addition of new nominees and flexible coverage, it can let a woman enhance the protection upon marriage or childbirth within the policy term.
 

Critical illness rider^[2]:
 

Some term insurances cater to women’s health-specific needs through the critical illness rider. They offer coverages for breast, ovarian, or cervical cancer, which are specific to women and may help in better management of the expensive treatment costs.
 

Waiver of premium^[4]:
 

Some term insurances offer  waiver of premium  in situations of permanent disability due to accidents or diseases. This may help women sail through such situations without worrying about sustenance.
 

Why do women need term insurance plans?
 

Whether single or married, homemaker or working, every woman wants to safeguard her loved ones from financial troubles when she is no more. The following reasons may explain why term insurance is ideal for women in this aspect.
 

Contribution to family income:
 

The tax savings through a term insurance may enable a woman to add to the family income. Even beyond her lifetime, the coverage amount through death benefit and chosen riders will add to the family income or take care of the expenses and debts.
 

Investment in long-term goals:
 

Be it your  child’s higher education, buying a property, or creating a corpus for loved ones, women need proper investment for  long-term goals. A term insurance may fit the bill here, taking care of the fulfilment of those goals even if the life assured is no more.
 

How to choose the ideal term insurance for women?
 

Choosing the ideal term insurance for women may be easier when you take strategic steps. Here’s what you can do.

• Starting with the estimation of your financial needs may be helpful. This can be done based on your age, number of dependents, marital status, income, and life goals.
• You may look for a policy tenure that covers you majorly in your vulnerable time, when financial protection is much needed.
• Depending on the amount you want to accumulate, you may pick a plan with wholesome coverage at an affordable premium.
• Next you can check the riders available and pick especially the ones that cater to women-specific needs.
• Checking the claim settlement ratio may help you track the credibility of the insurer.
   

Conclusion
 

As a woman, keeping your loved ones in comfort has surely been your prime focus. A rightly chosen term plan may carry on with that even if you are not there.
 

FAQs
 

a. What is the right age for a woman to apply for term insurance?
 

There’s nothing called as the “right age”. Applying early^[2] for term insurance may bring you the benefit of a low premium.
 

b. What makes term insurance an ideal choice for women?
 

The affordability, financial security, financial stability, and scope to pay off the loans and debts may make term insurance an ideal choice^[5] for women.
 

c. Can I increase coverage in the future for term insurance for women?
 

Yes, some term insurances also provide increasing coverage in the future to the policyholders including women^[1] depending upon the products terms and conditions.
 

d. What riders are available with my term insurance for women?
 

Riders^[1] like critical illness rider, accidental death benefit rider and waiver of premium are available in term insurance for women.
 

e. What factors affect the cost of premiums in term insurance for women?
 

Factors^[1] like age, health conditions, income, family medical history, lifestyle, habits, and occupation affect the cost of premiums in term insurance for women.
 

f. Are there any tax benefits for term insurance for women?
 

Yes, there are tax benefits^[1] available for term insurance for women under sections 80C and 10(10D) under the Income Tax Act 1961.
 

References: