Term insurance plans cover the pure risk and provide substantial life insurance coverage for a nominal amount. In the industry, these plans are generally positioned as protection for the breadwinner against unfortunate life circumstances such as death or disability. In the unfortunate event of the breadwinner’s death, their family can use the amount received for immediate household expenses as well as to accomplish life milestones such as college and child marriage.
While most household members who earn a living buy life insurance to protect their families against unforeseen life circumstances, we often don’t think of buying life insurance for housewives in the family.
Housewives, who are often stay-at-home moms or housewives, may not have gainful employment, but they play an extremely crucial role in running the household. They take care of the children, take care of their studies, prepare food for the family, do the household chores, manage the monthly budget and take care of the elderly and sick members of the family. Their working hours not only extend from 9 am to 5 pm, but they often work tirelessly for more than 12 hours a day, without holidays or vacations.
In most households, the housewife is unfortunately taken for granted and the work she does is neither recognized nor appreciated by the rest of the household. It is only in the event of his unfortunate demise that the family realizes his true worth.
Assess the economic value of a housewife
A homemaker is truly invaluable and it is impossible to put a price on the love, dedication and service she gives to her family. But let’s put emotions aside for a moment and try to objectively assess the economic value of a housewife.
By calculating its economic value, we realize how essential it is for it to be covered by a life insurance plan. In his absence, the family may need to hire a full-time domestic helper to care for the children, do household chores and prepare food. They may also need to hire a tutor to help the children with their studies, as well as a nurse to care for elderly family members.
While it is possible to hire all the help needed, it comes at a significant financial cost that can be incredibly stressful for a grieving and emotionally strained family. In this difficult time, a life insurance payout would go a long way in easing the financial burden on the family.
It should also be considered that in some cases housewives are qualified to return to work and may choose to re-enter the labor market once their children grow up.
Benefits of a Term Plan for Housewives
- Substantial coverage for a nominal premium
Since these are usually pure protection plans with no added benefits, a term plan offers substantial life coverage at an affordable premium. Most life insurance companies also offer lower premiums for women.
- Advantage of an advance purchase
The sooner you buy a term plan, the lower your premium is likely to be. By investing early in a term plan, the housewife will benefit from the low premiums that will remain the same for the duration of the plan which could span 25 to 30 years.
While applying for the plan, housewives should also follow the underwriting guidelines just like other lives. Investing early, when one is likely to be in better health, would result in lower premiums.
More often than not, housewives are unaware of their own health and medical needs due to the high cost of living and expensive medical treatments. Investing in a life insurance policy that has additional health endorsements can provide the financial relief needed in case the housewife gets a serious illness like female cancers.
Purchasing a term insurance plan would also provide tax benefits to the working spouse under various sections of the Income Tax Act 1961. To fully understand these benefits, it is advisable to consult a Financial Advisor.
Above all, taking advantage of a term plan offers peace of mind to the housewife. In her absence, she is assured that her family is financially protected and that the life insurance coverage can be used to support the functioning of the household and family while achieving important life goals.
Ideal blanket for a housewife
While it is difficult to put a price on the emotional benefits that a homemaker brings to the family, in order to calculate the ideal amount of life cover, one can estimate the economic value of the homemaker. This can be done by identify all replacement costs that the family is likely to incur in the event of an unfortunate death. In India, according to the general underwriting guidelines, the life cover of the housewife cannot exceed that of the working spouse.
When calculating life cover, the family should also consider career change that the working spouse may have to undertake in order to be more available for the children as well as the elderly at home. With more nuclear families these days, it’s entirely possible that the remaining spouse will have to quit their job in order to be there for the kids during this difficult time.
In conclusion, investing in a term plan for the homemaker is crucial as it would help provide financial security to the family at a time when they need it most. Although there is absolutely no replacement for the housewife, having life insurance would go a long way in easing the financial burden and stress on the family.
The opinions expressed above are those of the author.
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