Why is Term Insurance important for Women?

Do you also think Term Insurance is not essential for women?

Then, let’s break this myth and understand why life insurance is important for women.

As per LXME’s Women and Money Power Report 2022, 58% of women have no insurance (life or health) in their name?. Shocking right? Let’s bridge this huge gap together!!

Why is Term Insurance important for Women?

Working Women: Nowadays both men and women are working and contributing equally for a living. This makes it important for both to have term insurance and secure their dependents financially.

If in the future there is an unfortunate demise of any of the working members then that income completely stops and the standard of living, of dependents, can get substantially hampered. The emotional loss is irrecoverable, however, you can get some financial stability by availing of adequate term insurance. 

Single Mothers: It is essential for single mothers to have term insurance. Single mothers need to be financially independent and ensure the security of their children. Term insurance can help them secure their children’s future by providing a lump sum amount in case of any unfortunate event.

Home Makers: A homemaker may not earn an income, but their contribution to the household is invaluable. In the event of their unexpected demise, their family may experience a significant financial impact due to the loss of their services. Term insurance can provide a lump sum payout to the family, which can help cover household expenses and support their lifestyle.

What is Term Insurance?

Term Insurance is the type of life insurance that is one of the simplest and purest forms of life insurance. It provides death benefits to policyholder’s dependents against fixed periodic payments as premiums for a limited period.

Features:

Maximum coverage at a minimum premium: Offers the most affordable premiums with maximum coverage as it is a pure term insurance plan.

Entry Age: Minimum age for buying term insurance is 18 years.

Flexible-Premium Payments: Policyholders can choose the payment frequency of monthly, quarterly, or annually as per convenience.

Riders or Add-on Coverage: Various riders are available such as waiver of premium, accidental disability, and critical illness.

Adjustable coverage: Allows you the flexibility to update your policy as per the changing financial needs.

Tax Benefits: You can claim tax deduction under section 80C up to the limit of ₹1.5 lakhs and also get exemption under section 10(10D) on the sum received under a life insurance policy, including any sum allocated by way of bonus on such policy.

How much Term Insurance should one have?

Never Mix Insurance and Investment together

– The saying “never mix investment and insurance” suggests that it is not a good idea to combine investment and insurance products into a single financial product. This is because the primary purpose of insurance is to provide financial protection against unexpected events, such as death, disability, or illness, while the primary purpose of investment is to generate a return on investment over a period of time.

– It is generally recommended that individuals purchase insurance products, such as term life insurance, to provide financial protection against unexpected events. Separately, they can invest in a diversified portfolio of assets, such as stocks, bonds, or mutual funds, to achieve their investment goals over time.

– By separating insurance and investment needs, individuals can better tailor their financial plan to their unique situation and ensure they get the best possible value for their money.

– So, ideally one should opt for pure life insurance i.e. Term Insurance which offers a higher sum assured at a lower cost.

To summarize, term insurance is essential for women to ensure the financial security, equal responsibilities, and lead an independent life.

“A policy of life insurance is the cheapest and safest mode of making a certain provision for one’s family”

–Benjamin Franklin

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