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Why Term Insurance is Important for Women?

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Why Buy Term Insurance for Women?
December 17, 2023

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As of today, the role of women in the workforce has become equal to that of men and the women have emerged as partners in financial contribution and all related economic activities. This has also increased the importance of financial security for women. This holds true in all domains professional as well as domestic. One of the prime methods for ensuring complete safety and security of the family members is purchasing a term insurance plan that meets your specific needs and for women, this is very important.

Given the fact that women in India have emerged as equal participants in resource building for families, the reasons for seeking term plan coverage for women are significant. A term plan is a simple life insurance plan that offers the benefit of building up the main corpus until a fixed term and in the event of the policy subscriber's demise, the sum assured is paid by the insurer to the subscriber's nominee(s). However, unlike a life insurance plan, there are no maturity-benefits in a term insurance plan i.e. if the policy holder survives the plan term, there is no entitlement to any benefits or proceeds etc. At the same time however, a term insurance plan comes at very economical premium rates that don't put too much stress on your pocket. Besides, many insurers today offer term insurance coverage with a return-of-premium option. This option entitles the policy subscriber to benefits in the shape of premiums paid towards the policy, after the maturity of the policy term.

Term plans form an important part of any healthy financial portfolio as they are instruments for future safety and economical coverage for your dependent family members. Therefore, as responsible consumers, you must invest in a suitable term insurance plan that offers the best conditions of coverage. For women, this is equally important. As equal participants in the monetary activities of the family, any issue pertaining to a woman's financial safety directly impacts the family's finances as well. By taking out a suitable term insurance plan, a woman ensures that there is significant financial back up in place that can provide for the needs of her dependent ones, even in her absence.

In fact, it is a must-have for all women, regardless of their marital status and employment position. A married woman should be included in the joint plans together with their husbands. This entitles them to benefits under family floater plans. However, every woman who is working and can pay the regular premiums must opt for individual term plans as an active contributor and not just as a nominee. For a single mother with dependent children or other relatives, choosing the best term plan is very essential. This not only ensures that her finances stay secure for her loved ones, but also offers a guaranteed solution towards leading a stress free life without having to worry about the capital resources for her family. Before choosing a suitable term insurance plan, you must make sure that it meets your requirements and you must compare the features of different options offered by various insurers.

Importance of Term Insurance for Women

Today, women are breaking barriers and shattering glass ceilings. But, they aren't always making their own investment choices. Let's take a look at why women should opt for term insurance policies: 

  • Financial Protection

    Everybody strives to achieve financial protection. Whether you're a working woman, a homemaker, or a daughter looking after her ageing parents, we're sure you'd like to secure your future financially. A term plan that offers a maturity benefit provides you with exactly that. If anything were to happen to the insured individual, the death benefit would provide the woman's dependent family members with some financial stability. Even if you were to outlive the policy term, you'd be entitled to the return of premium, depending on the kind of plan you choose. You can then use this money to fulfil a long-term goal, such as purchasing a car or going on a vacation.

  • Pay Off Debts

    Today, women are financially independent. Many of them even take out loans to help them achieve their dreams. If anything were to happen to these women while they're paying off these loans, their spouse, children or parents may suddenly find themselves grappling with debt. By purchasing a term insurance plan, you ensure that you take care of your own debt and leave behind a legacy of love and protection for your family.

  • Plan for Retirement

    Given the rising rate of inflation, it's become more important than ever to plan for retirement. Women also need to get their finances in order before they decide to retire. A great way to do this is by purchasing a term insurance plan with a maturity benefit. The policy will build up a corpus over time and provide it to you as a lump sum on maturity.

  • Tax Planning

    Women today are taking over in the workplace. As many of them are earning members, they should purchase term insurance to help with their tax planning. Under Section 80C of the Income Tax Act 1961, premiums paid towards the upkeep of any life insurance plan, including term insurance, is exempt from taxes. Additionally, the maturity or death payout received from these plans are also tax-free.

5 Reasons Why Women Need Term Insurance

Term insurance plans provide financial security and stability. Here's a look at the top five reasons why women should purchase term plans for themselves:

  1. They Contribute to Their Family's Income

    Today, women help contribute to their family's overall income. If anything were to happen to the woman, their family would be left without a significant income, which could lead to financial struggles. Women must purchase a term plan to ensure that their family will always enjoy financial stability.

  2. They Have Expenses

    There are many single women who believe they do not need to purchase insurance as nobody depends on them financially. But, what they don't always realise is that any debt they have is automatically transferred to their nearest family member. This means that a woman might leave her retired or older parents grappling with car or home loans if something were to happen to her. By purchasing a term plan, women can ensure that they do not leave behind a legacy of debt. Instead, they can provide their loved ones with the money required to clear their debts.

  3. They Play a Huge Role as Homemakers

    Let's assume that a woman has opted to stay home and look after her family. If something were to happen to her, her family will struggle in her absence. Apart from dealing with grief and loss, the other parent will be left to manage the responsibilities of both parents alone. The family may end up having to hire a nanny or a cook to help make up for the loss. These expenses also add up over time, which is why women should secure their life with a term plan.

  4. They Can Enjoy Their Retired Years

    Once a woman decides to retire, she needs to ensure that she has enough money to live out the rest of her years in comfort. To battle rising rates of inflation, women can purchase a term plan that offers a maturity benefit. The premiums paid over the years are put together to provide the insured with a payout at the end of the policy term. This money can be used to fulfil life-long dreams like taking a long vacation or mastering a new skill.

  5. They Can Always Support Their Families

    Life is unpredictable. In the blink of an eye, circumstances can changes and lives are lost. Many women may support their families financially and emotionally. If anything were to happen to them, their loved ones might have to make adjustments or give up on their dreams to deal with the financial repercussions. By purchasing a term plan, a woman ensures that her loved ones are always taken care of financially. She safeguards their future and allows them to continue to chase their goals.

HDFC Life offers HDFC Life Smart woman plus - a women-specific plan that caters to the financial needs of the modern Indian woman and offers guaranteed financial coverage at various points of her life. For details, click on the mentioned link: https://www.hdfclife.com/women-insurance-plans/smart-woman-ulip-plan. 

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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