Are homemakers eligible for term insurance? Key factors to consider before buying one

In Indian families, the homemaker is the backbone of the household. Nevertheless, when it comes to finances and insurance, she is more often sidelined. Given the economic value of her daily chores and responsibilities, a homemaker should be adequately covered by term insurance just like any other earning member of the family.

In this article, we will discuss more about why a homemaker needs to buy a term insurance policy and other integral pointers concerning the same:

A homemaker does not earn a regular income; nevertheless, she performs a plethora of tasks that remain unrecognised and unpaid. However, in her absence after her unfortunate demise, the family may need to hire someone or make some alternate arrangements, and this will then need to be paid for. And all of this, to a certain extent, can be financially compensated via the term insurance claim.

As a good financial planning tool, insurers in India are offering specialised coverage plans for non-working homemakers that provide substantial coverage at a relatively low premium.

A homemaker does so much to ensure that the finances of her household do not go haywire. So, even though nothing can compensate for her affection and relentless efforts, term insurance might come in handy to meet some of the crucial expenses like the child’s education, debt obligations, etc.

To ensure the homemaker has adequate health cover, you can also add critical illness-related riders to secure added benefits. These riders can come as help in case a critical illness is diagnosed, without touching the actual death benefit.

Nearly all insurers in India offer term insurance for homemakers, including the likes of Life Insurance Corporation of India, HDFC Life, ICICI Prudential, Bajaj Allianz, Max Life, and SBI Life, among others.

So, if you are planning to buy term insurance for yourself or your spouse, here is a lowdown on some of the important pointers concerning the same.

1. To be eligible for the term insurance, the potential insured (who in this case is a homemaker) should be between 18 and 65 years.
2. Meet some basic health requirements.
3. For deciding the sum assured value, the insurer will assess your spouse’s income, liabilities, and overall financial needs to arrive at the appropriate sum assured value. Usually, the sum assured value is linked to a multiple of the spouse’s income, so as to avoid overinsurance.

Kirang Gandhi, a Pune-based financial mentor, noted that one should factor in the family’s lifestyle expenses, childcare responsibilities, outstanding loans, future goals, claim settlement ratio of the insurer, policy duration, as well as inflation impact.

A woman aged 41 years can get PNB MetLife’s Saral Jeevan Bima, offering term cover up to 65 years of age and with the sum assured value of ₹ 25 lakh, at a premium of around ₹900/ month. While for securing a cover of ₹ 1 crore, she may need to shell out anywhere between ₹1,500 and ₹ 1,600 per month.

Basic KYC documents, like Aadhaar, PAN etc. Medical test Choosing insurer, policy, policy term and frequency of premium payment.

Gandhi added that choosing adequate coverage instead of a low premium should be the priority. This is because her role has huge economic value, even without a regular salary.

Ensuring that the couple is adequately covered will go a long way in securing your family’s financial future and is, in fact, an integral part of comprehensive financial planning.