Term insurance plans cover pure risk and provide substantial life insurance coverage for a nominal amount. In the industry, these plans are typically positioned as family support protection against adverse life circumstances such as death or disability. In the unfortunate event of the dependent’s death, his family can use the amount received for immediate household expenses as well as fulfilling important life milestones such as children’s higher education and marriage.
While most earning members of the household buy life insurance to protect their families from life’s contingencies, we often don’t think about buying life insurance for the breadwinners in the family.
Housewives, who are often stay-at-home mothers or housewives, may not have a job, but they play an extremely important role in running the household. They take care of the children, take care of their education, prepare food for the family, do the housework, manage the monthly budget and take care of elderly and sick family members. Their working hours are not only 9 to 5, but they often work tirelessly for more than 12 hours a day, without holidays or holidays.
In most households, the housewife is unfortunately taken for granted and the work she puts in goes unrecognized and unappreciated by the rest of the household. It wasn’t until her unfortunate demise that the family realized her true worth.
Estimating the economic value of a homemaker
A housewife is truly priceless 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 home craftsman.
Calculating its economic value, we realize how important it is to have it covered by a life insurance plan. In her absence, the family may need to hire a full-time housekeeper to take care of the children, do housework and prepare meals. They may also need to hire a teacher to help the children with their studies, as well as a nurse to take care of the elderly family members.
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While it may be possible to hire all the help you need, it comes at a significant financial cost, which can be incredibly stressful for a grieving and emotionally strained family. At this difficult time, a life insurance payout would go a long way in easing the family’s financial burden.
We must also consider that in certain cases homemakers are qualified to return to work and may choose to rejoin the workforce after their children are grown.
Benefits of Term Host Plan:
Substantial coverage for a nominal premium
Since these are usually pure protection plans without any additional benefits, the term plan offers substantial life cover at an affordable premium. Most life insurance companies also offer lower premiums for women.
Early bird advantage
The earlier you buy a term plan, the lower your premium. By investing early in a term plan, the homeowner will benefit from low premiums that remain the same throughout the life of the plan, which can span 25-30 years.
While applying for the plan, homeowners will also have to meet the sign-up guidelines, just like other lives. Investing early, when a person is likely to be in better health, would result in lower premiums.
More often than not, housewives neglect their own health and medical needs due to the high cost of living and expensive medical treatment. Investing in a life insurance policy that has additional health riders can provide the necessary financial assistance in case a housewife is affected by a critical illness like female cancer.
Buying 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.
Peace of mind
Above all, using a fixed plan offers peace of mind to the housewife. In her absence, she is assured that her family is financially protected and the life cover can be used to support the household and family along with achieving important life goals.
Perfect amount of coverage for a DIYer
While it is difficult to put a price on the emotional benefits that a homemaker brings to a family, for purposes of calculating the ideal amount of lifetime coverage, the economic value of a homemaker can be estimated. This can be done by identifying all the replacement costs that the family is likely to incur in the event of her unfortunate death. In India, as per general insurance guidelines, the lifetime cover of a housewife cannot exceed that of a working husband.
When calculating lifetime cover, the family should also take into account any career change the working spouse may need to make to be more available to the children as well as the elderly at home. With more nuclear families these days, it is quite possible that the surviving spouse may have to quit his job to be with the children at this difficult time.
In conclusion, investing in a term homemaker plan is crucial as it would help provide for the family financially in the hour of greatest need. While there is absolutely no substitute for a homemaker, having life insurance would go a long way in easing the financial burden and stress of a family.
(By Karthik Raman, Chief Marketing Officer and Chief Product Officer, Ageas Federal Life Insurance)