Term insurance is a type of life insurance that provides a lump sum amount to the nominee or beneficiary in case of the policyholder’s death during the policy term. Term insurance is one of the most affordable and effective ways to secure your family’s financial future in the event of your absence. However, choosing the best term insurance plan for women can be overwhelming, as there are many factors to consider and compare. Here, we will help you understand the benefits of term insurance for women and how to select the most suitable plan for your needs.
Why Term Insurance for Women?
Now that you know what is term plan, let’s delve into its importance for women. Women play a vital role in the family and in society. They are homemakers, breadwinners, entrepreneurs, professionals, and leaders. They contribute to the household income, manage household expenses, and support their children’s and other dependents’ education and well-being. Therefore, women need to have a term insurance plan that can protect their families from any financial hardship in case of their untimely demise.
Term insurance for women has several advantages, such as
- Low premium rates: Term insurance plans for women are generally cheaper than those for men. Usually, the women’s life expectancy is higher, and there is a lower mortality risk. The difference in premium rates for men and women can be up to 15% for some plans. For example, a 30-year-old woman can get a term insurance of ₹ 1 crore for 30 years for a monthly premium of ₹ 590, while a 30-year-old man may have to pay ₹ 690 for the same plan.
- Tax benefits: Term insurance plans for women also offer tax benefits. You can claim a tax perk of up to Rs. 1.5 lakh per annum for the premium paid for your term insurance plan under Section 80C, and the death benefit received by your nominee is tax-free under Section 10(10D), provided the sum assured is 10 times the annual premium.
- Riders and add-ons: Term insurance plans for women also come with various riders and add-ons that can enhance the coverage and benefits of the plan. Some of the common riders and add-ons are critical illness, disability cover, accidental death, waiver of premium, income benefit, and women-specific benefits.
How to Choose the Best Term Insurance Plan for Women?
When you decide to buy term plan online, here are some key factors to consider:
- Your age: Your age is one of the most important factors determining the premium rate and the coverage amount of your term insurance plan. The younger you are, the lower the premium rate and the higher the coverage amount you can get. Therefore, it is recommended to buy a term insurance plan as early as possible, preferably in your 20s or 30s, to lock in a low premium rate and a high coverage amount for the long term.
- Your income: Your income is another crucial factor that influences the coverage amount of your term insurance plan. The coverage amount should be adequate enough to replace your income and support your family’s financial needs in your absence. A general rule of thumb is to have a coverage amount of at least 10 to 15 times your annual income. However, you can also use online calculators or consult an expert to determine the optimal coverage amount based on your income, expenses, liabilities, and goals.
- Your health: Your health is also a key factor that affects the premium rate and the eligibility of your term insurance plan. Term insurance plans for women usually require a medical examination or a health declaration to assess your health status and risk profile. Suppose you have any pre-existing medical conditions or lifestyle habits, such as smoking, drinking, or obesity. In that case, you may have to pay a higher premium rate or face rejection or exclusion of coverage. Therefore, it is best to maintain a healthy lifestyle and be transparent about your medical history to avoid any complications or disputes later.
- Your family history: Your family history is also an important factor that impacts the premium rate and the coverage of your term insurance plan. Term insurance plans for women may ask you to provide information about your family’s medical history, such as any hereditary diseases, chronic illnesses, or premature deaths. If you have a family history of such conditions, you may have to pay a higher premium rate or get a lower coverage amount or a shorter term. Therefore, it is advisable to be aware of your family’s medical history and choose a plan that offers adequate coverage and benefits for your specific needs.
- Your policy term: Your policy term is the duration for which your term insurance plan will provide you with coverage and benefits. The policy term should be long enough to cover your working years and your retirement years so that you can have financial security for yourself and your family throughout your life. The policy term should also match your financial goals and liabilities so that you can pay off any debts or loans and achieve any long-term goals before the policy expires. A typical policy term for term insurance plans for women ranges from 10 to 40 years, depending on the plan and the insurer.
- Your premium payment mode: Your premium payment mode is the frequency and the method of paying the premium for your term insurance plan. Depending on your convenience and budget, you can pay the premium monthly, quarterly, half-yearly, or annually. You can also choose to pay the premium online or offline through various modes, such as debit card, credit card, net banking, cheque, or cash. You should choose a premium payment mode that suits your cash flow and your lifestyle, and also check for any discounts or incentives offered by the insurer for different modes of payment.
Term insurance for women is imperative to secure the family’s financial future and achieve their individual financial goals. It can provide low-cost, high-coverage, and tax-efficient protection and financial backup to their families in case of any unfortunate event. Remember, a wise decision today is a better future tomorrow!