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Understanding Term Insurance for Housewife

TeamAckoJun 19, 2024

Every family has its powerhouse, the one who keeps everything running smoothly. Whether she's a devoted mother or a caring wife, she's the heartbeat of the home. From managing daily chores to balancing the budget, she holds everything together. Without her, a family feels incomplete. 

While life without her can seem unimaginable and emotionally exhausting, death comes with no warning. This is where the Term Insurance for housewife concept comes into the picture. Read ahead to learn more about it.

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What is Term Insurance for Housewife? 

A Housewife Term Insurance policy is a concept where the homemaker or the housewife purchases a Term Insurance policy to ensure financial support to the family in case of her untimely death. A term policy for housewife provides your family with a death benefit or sum assured. This amount can be paid in a lump sum or at frequent intervals.

Most importantly, the death benefit allows your family to continue paying expenses, including groceries, school or college fees and any outstanding amounts such as debts or mortgages.

Have a look at the example below. 

Mrs. Mehta, a 35-year-old Indian homemaker, lives in Mumbai. Her husband is the family's leading provider, earning a living from his corporate job. Their two kids are seven and ten years old. Mrs. Mehta is in charge of the children's education and welfare and handling home duties.

Mrs. Mehta evaluates the family's financial needs, considering the costs of raising children, maintaining the home, and any outstanding debt. Based on her assessment, she chose a coverage amount of ₹1 crore for a 20-year policy period. The term insurance plan provides a range of options for paying premiums. Mrs Mehta decided to pay a premium of ₹10,000 per year, which is reasonably priced for the family.

In the terrible event that Mrs Mehta passes away during the policy term, the family will receive a lump sum payment of ₹1 crore from the term insurance plan. This sum serves as a safety net, guaranteeing her husband and kids to continue living the way they do, settle any debts they may have, and cover other costs like the kids' future schooling.

How do Term Insurance policies for Housewife work?

A housewife plays many roles in day-to-day scenarios. In simpler terms, she takes care of the children, cooks, cleans, and much more. Without her, a family would need a household, a cook, a nanny, and more!

To put it in purely economic terms, without you, your family would need to hire one or more people to keep the home running. All this matters to determine the policy's sum assured and the payable premium. 

Health and Lifestyle Habits

  • Housewife Term Insurance policies are determined by your HLV and your health, among other factors. Health quotient and HLV are needed to determine the sum assured and premium.

  • Your health status and lifestyle habits influence your premium payments and the death benefit or sum assured. 

Qualifications

  • Educational qualifications, jobs you worked at, and how much you made or could have been making now should be considered in your qualifications to determine your coverage and how much money your family should receive in case of your untimely death.

Premium Payments

  • Based on your qualifications, roles, and health, your insurance company will allow you a specific premium payment.

  • You can make your premium payments at once in a lump sum or in regular instalments over your policy tenure.

Beneficiaries

  • After calculating your Human Life Value and premium payments, you will need to name the beneficiaries of your policy.

  • These nominees will be the ones who will receive your death benefit or sum assured after you pass away.

Assessing the Human Life Value in case of Housewife Term Insurance

The Human Life Value (HLV) assigned to you as a housewife is impossible to calculate precisely, but for insurance purposes, it may differ depending on your lifestyle, circumstances, and family needs. 

As a superwoman who literally does it all, identifying what roles you manage and the salary you would be making from each is needed to determine the Human Life Value. For instance, if you're your family's chef, nanny, housekeeper, and chauffeur, the salaries that would be paid to the person/people who would perform these roles amount to your HLV.

What are the benefits of a Housewife Term Insurance policy?

A Housewife term plan offers you and your family several benefits to keep the house running after you pass away. The following are some benefits of a Housewife Term Life Insurance policy.

  • Financial security

A Housewife Term Insurance policy guarantees your family's financial security and a way for them to keep the house running after you're gone. The death benefit from your policy can cover your family's cost of living, pay for expenses, and help them with education fees and any outstanding amounts you may have left behind.

  • Affordable premiums

You get lower-cost premium payments in this policy because your coverage terms are limited; this is a pure life cover devoid of any savings or investment components. 

  • Customisable

A benefit of the HTI policy is that it allows you to choose the policy term and add-ons. In addition, your policy's payouts can be paid out in regular frequencies or a lump sum, as your family requires.

  • Peace of mind

You can be sure your family can keep your precious household running in case of your demise.

  • Tax benefits

Any premium payments you make for your Housewife's Term Life Insurance policy are tax-deductible under section 80C of the Income Tax Act. You and your family can utilise these tax benefits with your Term Life Insurance policy. A tax deduction of one and a half lakh rupees is permissible every year as per the applicable terms and conditions.

Explore ACKO Life Flexi Term Plan

The ACKO Life Flexi Term Plan is a highly flexible plan, providing comprehensive coverage at budget-friendly premiums. Prioritising digitalisation also saves time and effort by expediting and simplifying the processes involved in purchasing, maintaining, and filing insurance claims. Due to ACKO's commitment to offering solutions that prioritise its customers' needs, the ACKO Life Flexi Term Plan is a highly suitable option for individuals seeking adaptable insurance coverage.

ACKO Life Flexi Term Plan: Key Benefits 

Flexible Policy Terms

Affordable Premiums

Flexibility in Sum Assured

Will Creation Services

Convenient

Adaptable Payout Options

Essential Riders

Digital Approach

ACKO Life Flexi Term Plan: Additional Riders

You can easily boost your ACKO Life Flexi Term Plan coverage with three valuable riders. 

  • ACKO Life Accidental Total Permanent Disability Benefit Rider: This useful disability benefit rider offers financial protection against disability due to an accident. It provides a lump sum to help you from the financial strain associated with significant medical expenses. From covering medical bills to easing mortgage burdens, it offers comprehensive support during challenging times.

  • ACKO Life Critical Illness Rider: In the event of a critical illness, this critical illness rider protects you from financial burdens. This can be added to your ACKO Life Flexi Term. It covers 21 critical illnesses, including life-threatening common diseases among women, such as breast cancer, cervical cancer, fallopian cancer and ovarian cancer. 

  • Accidental Death Benefit Rider: Accidental Death Benefit Rider, also referred to as the ADB Rider, fortifies your ACKO Life Flexi Term Plan by offering financial protection to your loved ones in the event of your demise due to an accident. It is one of the most affordable riders, offering large life coverage.  

Choosing the Right Term Insurance for Housewife

A few essential factors must be considered before choosing a term plan for a housewife. These are:

  • Adequate sum Assured: Assessing the family's financial needs and determining the assured amount is crucial. The family may consider debt, liabilities, and future financial objectives like retirement and a child's schooling. If the housewife suddenly passes away, the payout should be enough to handle the financial problem.

  • Cost-effectiveness: The family can determine the term insurance premium and its affordability by taking into account the present and future expenses of the family, as well as the required policy term and the sum assured

  • Claim Settlement Ratio: Determining the financial benefits appropriately requires considering the insurance provider's reputation. Compare the insurance companies' claim settlement ratios to assess their level of customer service and claim resolution effectiveness.

Factors Affecting Housewife Term Insurance Premium

The primary factors that affect the premium amount of an HTI are:

  • Age: One of the most significant variables affecting insurance rates is age. Because younger people are viewed as less dangerous than older people, they typically pay cheaper premiums. 

  • Health: The housewife's health is vital in calculating the premium. Insurance providers could demand a medical examination or ask health-related questions to evaluate the risk. Pre-existing medical issues may result in increased premiums or coverage exclusions.

  • HLV: It is used to determine how much coverage is suitable. A higher HLV could result in a larger premium.

Wrapping it up

Housewife Term Insurance offers homemakers crucial financial security and peace of mind by guaranteeing their families' safety in the event of unanticipated circumstances. It is a beneficial alternative for people prioritising financial stability without complex investment features, even if it usually does not offer conversion choices or accumulate cash value. Housewife term insurance emphasises the value of safeguarding loved ones' futures and is essential in helping families create a safety net.

Frequently Asked Questions

Here’s a list of common questions and answers related to Housewife Term Insurance.

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As a housewife, can I buy a Housewife Term Life Insurance policy for myself?

Yes, you can buy a Housewife Term Life Insurance policy on your own behalf. You have the option of buying the policy individually or as a policy with a joint term cover. A joint term cover policy means that both you and your husband own the policy equally.

What is Human Life Value in Housewife Term Life Insurance? 

A Human Life Value in Housewife Term Insurance is an approximate monetary value that you provide to your family by performing various roles as a housewife. This value is used to determine how much your family should get when you're not around. 

Should housewives purchase a Housewife Term Life Insurance policy?

It's not just housewives who can find the Housewife Term Life Insurance policy beneficial. The policy can also be beneficial for widows, single mothers, and wives who have husbands who can no longer work.

Why should homemakers buy Term Insurance plans?

A housewife's term life insurance policy is an important financial support you can have to protect your family financially after you pass away. It can help your family cover daily expenses, education costs, and outstanding balances such as debts or mortgages.

Which age is the upper limit for a housewife to buy term insurance? 

Depending on the term plan option selected and the eligibility requirements set forth by the insurance provider, a housewife may be able to obtain a term plan at any age up to 65. 

Can a husband and wife share a term insurance policy? 

A husband and wife can be covered by the same term insurance policy, which we call the combined term insurance plan.

Are term insurance premiums for a housewife taxable? 

Term insurance premiums for a housewife are typically not subject to taxes. Both the premium payments and the benefits obtained from the coverage are non-taxable.

Can I buy myself a Housewife Term Life Insurance policy as a housewife?

Yes, you can buy a Housewife Term Life Insurance policy on your own behalf.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.

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