Term insurance is a crucial financial tool, offering financial security to your dependent family members through a death benefit payout during unfortunate circumstances, even in your absence, provided you are the policyholder and the insured.
Considering the typical requirements of women, like critical illness coverage for specific women-centric ailments like breast cancer, ovarian cancer, cervical cancer, etc., term plans prove to be an essential tool to manage such huge treatment costs. It ensures that to retain your peace of mind and manage your finances well.
What is term insurance for women?
Term insurance plans for women are like other traditional term plans. If the policyholder dies while the plan is active, the policy pays a fixed sum as a death benefit.
Term plans are especially noted for their affordability, offering high sum assured coverage protection benefit at a comparatively low cost. For women, this can be further lower, as the average life expectancy of women is longer than men. Moreover, the risk of heart ailments and attacks is comparatively lower in women than in men.
All these factors combined make term insurance plans for women a much more affordable approach to secure their beloved family members.
Reasons for term insurance for women
Women need to think about future financial stability and invest in term plans due to the following reasons:
1. Financial security of the family:
Like any other term plan, term insurance for women allows the financial stability of the beloved family members and ensures adequate financial backing during tough times despite your absence. The death benefit payout from this plan must act as a stable substitute for income and ensure your family lead a stable life.
2. Affordability:
Term insurance plans are the cheapest forms of life insurance, allowing high sum assured coverage at a comparatively much lower rate. Moreover, term plans for women are further cost-effective since women, on average, pose a comparatively lower risk to the insurers because of high life expectancies.
3. Critical illness cover:
Apart from the basic life coverage, term plans also offer the provision for critical illness coverage and ensure financial protection against multiple types of serious health issues like heart problems, kidney issues, cancer, etc., as per the terms of the chosen plan.
Features of term plans for women
Some of the typical features of term plans for women include the following:
1. Lower premiums:
The premium payable amount for term plans for women is comparatively much lower than that of men. Its affordability and cost-effectiveness are the principal reasons for its high popularity. Moreover, if you purchase early, you can save even further. The younger you buy, the cheaper it proves to be without compromising on the coverage extent.
2. Women-specific illness coverage:
These term plans allow coverage for women-centric ailments like cervical cancer, ovarian cancer, breast cancer, etc., apart from other critical ailments like heart issues, stroke, kidney problems, etc.
3. Tax benefits:
Term insurance tax benefit is another essential factor to consider when investing in this sector. The premiums paid towards a term plan can be utilised to reduce your taxable income for the year concerned. You can easily claim a tax deduction of up to INR 1.5 lakhs/annum u/s 80c of the IT Act. Further, u/s 10 (10d), you can claim a deduction for the proceeds received.
4. Childcare and children’s education coverage:
Term plans ensure the financial protection of the dependent children’s future. In the case of any mishap, the term plan death benefit payout to continue with their studies uninterruptedly and fulfil other requirements like healthcare, etc., ensuring a strong financial safety net.
How does return of premium work?
A term plan with the return of premium is called TROP, is similar to a standard term plan. However, the basic difference is that if you outlive the policy, you will receive the total premium amount paid so far with interest, unlike a standard plan, which does not offer any maturity benefit.
In case the insured-cum-policyholder survives the plan tenure, he/she will receive the total premium amount at the end. However, in the case of any mishap, the designated nominee or beneficiary will receive the death benefit payout.
This is an ideal life insurance policy for risk-averse individuals.
Why choose TROP?
It is best to choose TROP over other standard term plans because:
- It proves to be suitable if you are seeking life cover for protecting your family, and also want the premium amount returned on maturity
- These plans allow medical tests
- Allows the return of the total premium amount paid so far on the completion of the plan tenure
- Allows flexible premium payment options
Example
A 26-year-old working woman purchases a TROP life cover with an annual premium of INR 15000 for a total sum assured of INR 90 lakh for a plan tenure of 30 years. So, she needs to pay INR 15000 for 30 years.
Now, 2 things can happen:
- The lady passed away during the plan term. Then, her nominees will receive the sum assured amount of INR 90 lakhs as death benefit.
- She outlives the plan term. So, she will receive the entire premium paid amount of INR 15000 x 30, i.e., INR 450000, along with relevant interest and other additional bonuses as applicable based on the chosen plan terms. Without the Return of Premium clause, this payout would not have been possible.
Conclusion
We have carefully highlighted all the significant aspects of term insurance with Return of Premium. After careful calculation, you can proceed. The best time to invest here is early in your youth; the second-best time is NOW. So, without any further delay, just go for it to ensure the financial security of your beloved family.
