Women are strong, fearless, determined and independent. Focused on obtaining a sound education and growing in their careers, women are slowly but steadily becoming equal contributors in the household. Along with their jobs, they also run the household, look after the children, and assist the elderly at home.
With women being the centre-point of the home, it is as vital for a woman to have life insurance cover as for a man. While many different types of plans exist in the market, investing in a term plan is crucial as it offers a substantial life insurance cover at the most affordable premiums. Ideally it is the first financial asset you should buy to financially protect yourself from life’s uncertainties.
Investing in a term plan offers women buyers the following benefits:
A term plan ensures that your family is financially protected in case of your unfortunate demise. As more women join the workforce and contribute to the household’s income, the need for insurance becomes paramount. It is all the more crucial for a single woman with dependent children or parents as it enables the family to live a financially secured life in case of her untimely demise.
Advantage of early purchase
Buying a term plan early in life has many advantages apart from providing adequate and affordable life insurance protection. You pay low premiums when you start young as you are likely to have better health and elaborate medical tests may not be required. Plus, you continue to pay the same low premium throughout the term of the insurance plan.
Acts as a safety net for career goals
Women today are much more entrepreneurial; following their passions and setting up their dream ventures. However, the initial investment in these business ventures could build up some debt which needs to be repaid over a period of time. If during this period, the woman unfortunately dies, her loved ones will become burdened with this debt. Investing in a term plan will help her family to pay off this debt in case of this unforeseen circumstance.
Life insurance for women also tends to be more cost-effective as women in general, have higher life expectancies than men. This generally translates into lower premiums for women.
Critical illness benefits
With a hectic lifestyle and increasing levels of stress, women are becoming more prone to certain major illnesses. Opting for a critical illness rider will financially assist you in case you are unfortunately diagnosed with such an illness. A lump sum benefit is paid out if the rider gets triggered, which helps meet treatment expenses and any loss of income caused due to the illness.
Under Section 80C of the Income Tax Act, 1961, one can claim a tax deduction of up to Rs. 1.5 lakhs on the premiums paid towards a term insurance policy. These tax benefits apply to everyone, and it is advisable to consult a financial advisor for more information.
When considering the purchase of a term plan, there are several factors that a woman buyer should definitely keep in mind.
Adequate life cover
When purchasing a term plan, ensure that the cover you take is adequate to meet the needs of your dependents. Remember, life insurance money not only helps meet your family’s regular household expenses, including outstanding loan EMIs, but also major future requirements like children’s higher education. This also ensures your family doesn’t ever have to dip into their savings or take expensive loans.
Features of the plan
Carefully assess the features of the plan such as the flexibility and duration of paying premiums, as per your requirement, budget and financial objectives.
You can widen your coverage for other risks such as accidents or critical illness by taking insurance for them in the form of riders that can be attached to the term plan. This happens at a nominal increase in premium.
A term plan can be bought either through an online or offline mode. An online term plan is one bought directly by the customer through the website or mobile app of the life insurer with no third-party intervention. On the other hand, an offline term plan is when the customer purchases the plan through the life insurer’s distribution channels such as agency, bancassurance, broking, aggregator etc.
While the essence of the term plan remains the same, an online plan generally comes at a slightly lower cost as there is no brokerage involved. However, when buying a term plan through an offline channel, the insurance advisor would help you with the entire process and advise you on the features, terms and conditions, and other details.
To sum it up, for a woman, proper financial planning is required so that you can meet and achieve all your goals and milestones in life. While building a comprehensive financial plan, remember that a term plan forms the base on which you can build the monument of your wealth for future needs.
Vighnesh Shahane is the MD & CEO of Ageas Federal Life Insurance