For the longest time, the monetary measure has been the only benchmark for assessing one’s contribution to a country’s economy. Perhaps this is why the share of homemakers’ efforts has collectively been looked over while talking about GDP growth. Until now, due to this very notion, housewives could only opt for coverage under a term plan basis their earning spouse’s existing term plan and income.
However, the underrated fact is that a housewife’s contribution – albeit intangible in financial terms – directly affects the productivity of the entire household, and by extension, the entire nation. But now, it’s heartening to see the insurance industry taking a positive stride in this direction by offering them a term insurance policy, independent of their spouse’s income or policy.
To ensure individual financial protection for India’s homemakers, Max Life Insurance recently launched their term insurance plan for them, irrespective of their husband’s policy. Here’s why this comes as a major milestone in the journey of making financial protection and inclusion more accessible and viable for all.
Bridging the glaring protection gap
In a country where the participation of women has been 16-20% of the total workforce in the last few years, this left out a huge protection gap for the non-earning women population. Besides that, the amount of unpaid care and work is considerably huge in a country like India. According to the data by UN women, unpaid care and work are estimated to be 10 and 39 percent of the GDP respectively. This load has only increased significantly after the pandemic outbreak.
Last year, the Supreme Court’s judgement in a case involving the demise of a homemaker also reiterated that the idea of homemakers not adding any economic value is problematic and must be overcome. A report by the Ministry of Statistics and Programme Implementation also indicated that women spend 299 minutes a day on unpaid domestic services for household members on average.
So essentially, even if the homemaker is not directly contributing to the finances, she is still the bedrock supporting the financial infrastructure of the family. In her absence, this mechanism will either break down or be impacted severely. If the housewife passes away, it also restricts the choice of job roles for the husband. In some cases, the family might even consider relocation or paid childcare. All of these directly impact the finances of a household. Therefore, the loss of a homemaker is no less than the loss of an earning member.
Zero dependencies on the spouse’s policy or income
While there were policies available to cover housewives earlier too, the condition was that it should be bought by their earning spouse. Also, they would only be covered for 50 percent of the sum assured where the income multiplier would be dependent on their husband’s annual income.
For instance, the spouse has an annual income of ₹5 lakhs and the income multiplier is 15 times the annual income. He will be eligible for a total cover of ₹75 lakhs cover, out of which assuming he takes a cover of 50 Lakhs, the wife will be eligible for ₹25 Lakhs cover. And most of the Insurers don’t offer term insurance of 25 Lakhs (It generally starts from 50 Lakhs cover).
And in the same example, if the husband ended up taking 75 Lakhs, the wife is no longer eligible to take any term covered basis the rules. The terms and conditions of the policy were heavily decided by the earning husband’s income and choice of cover.
Now, with this plan individually available to the housewives in the 18-50 age bracket, this dependency has been completely eliminated. Irrespective of whether or not the spouse opts for term insurance, the homemaker is eligible to exercise her option to purchase the policy out of free will. This eligibility is a huge step toward financial inclusion. To make the plan even more accessible, there are only two basic conditions for the purchase – the household income should be a minimum of ₹5 lakh and the homemaker should be a graduate.
Long due recognition of unpaid work
As we battle the third year of learning to live with the loss of lives due to the pandemic, term insurance has become an absolute necessity. The dreadful second wave is a painful memory of how fatal COVID-19 can be, for the young and old alike. Since the childcare is primarily taken care of by the mothers and homemakers, her absence is a huge loss for her dependents.
Apart from this, a lot of times, working women have to leave behind their careers to stay at home and take care of the family. Making them eligible for an independent policy is also a way of recognizing their efforts and sacrifices. Therefore, it is equally important to empower homemakers with an option to leave a legacy behind for their dependents like old-aged parents and children.
Household work is an important pillar for every family but often, it is not valued enough. This step is also a long-due recognition of the unpaid care and work that fuels the entire household but is often not counted as a financial contribution.
Sajja Praveen Chowdary is the Business Head for Term Life Insurance at Policybazaar.com
