The importance of women in any society is unimaginable. Her contribution to family, community, and society at large is increasing. She is not only taking care of family affairs and kids but she is also contributing to the family income. If her income is hampered, there are all the chances that many of the critical expenses of the family are compromised. Thus, it is as important for woman to buy term plan for the man.

Although, a term plan is a household name these days the fact is that a very small fraction of our earning population has taken any term plan. And out of those who have taken, very few are there who are sufficiently insured. These ratios are even poorer among women. Thus the importance of a term plan is more for a woman than a man.

Term plan and its importance-

To understand the importance of term plan we have to first understand what term plan is. A term plan is the purest form of insurance where your nominee gets the money on your death and you pay a periodic premium for taking this service from an insurer. As we start earning, we start planning for our future expenses. We become more responsible as we enter family life. House loan EMI, Car EMI, rocket high fee of good schools, not-so-pocket-friendly medical expenditures-all of these needs to be planned in advance. But when the income is hampered due to the sudden demise of the earner, it becomes very troublesome for those who are left behind. In a country like India, generally, the whole family is financially dependent on one or two earning members. Even if both husband and wife are earning, still it becomes impossible to run all expenses with halved income. In case you are a single mother or unmarried and taking care of your parents, your financial security becomes even more critical.

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A term plan is a shield to protect your future financial goals even in your absence. By paying a nominal premium periodically, your nominee becomes entitled to a handsome payout at the time of your death. It gives you mental peace that your family will not suffer financial stress when you are not there and none of your dreams shall remain unfulfilled. Of course, no amount of money can compensate for the loss of dear ones, but a term plan is certainly reduced the great financial burden from the family members.

Recognizing the importance of term plan, the government also gives you deduction under 80C on the premium paid for term plans.

How to choose the best suitable term plan-

Now when the importance of a term plan for women is established let us understand how to buy a perfect term plan. There are few factors which needs to be considered before buying a term plan like How much corpus do you need at the time of death for your family, how do you want the corpus payout be-lumpsum or annuity or a combination of both, what are your current earnings, how much premium you can pay, do you need additional features/riders with the policy, what are the claim settlement ratio of the insurer, what are your current savings/investments, etc.

Let us discuss each of these factors one by one in detail-

1. Sum insured- you should have an idea of your current and future expenses to cover yourself adequately. Suppose, you are married with a son who is studying in class 5th. In such a case, your current expenses shall vary greatly from your future expenses where you might need funds for his higher studies, marriage, etc. Having good savings always helps. If you already own an EMI free house and have handsome savings for your children's education and marriage, then your family can survive with a lower corpus. So, consider your current and future expenditure, your savings & investments and then decide an adequate sum insured.

2. The payout on maturity- different insurers offer you to payment of the sum insured in different options. Your nominee can get the full sum insured at your death or he/she can get a monthly pension for some years and then the balance sum or portion of death benefit initially and balance through a monthly pension. You can even appoint more than one nominee and decide the percentage of the sum insured to be distributed. So, considering the need, age of the nominee, the number of the nominee you can opt and change maturity payouts accordingly.

3. Current earning- This has direct bearing to the maximum sum insured you can be offered by an insurer, your current, and future needs and premium bearing capacity. As insurance in its true sense is the mechanism to make good for the loss and not to make a benefit out of it. Therefore, the insurer shall check your current income level and offer you the maximum sum insured accordingly.

4. Premium- higher the sum insured, higher the premium is the standard rule of the insurance. You can choose the premium payment frequency to be monthly, half-yearly and yearly. There are insurers who even provide the option to pay insurance premiums for total policy term at once. This can be advantageous for those who don’t want to pay a premium at regular intervals but at once for all.

5. Policy term- as earlier discussed, insurance means to make good for the loss. A term plan is basically financial protection against the untimely death of the earning member of the family. Thus, an insurer covers life until a certain age which as per the insurer is the maximum age of earning. So, choose the policy term that matches yours and insurer’s assumption.

6. Features/riders- some term plans offer you additional benefits on payment of some extra premium. For example- additional payment in case death is due to the accident, payment before death when you are diagnosed with a critical illness or terminal level. Some insurers even give an option where you get back the premiums paid.

7. Claim settlement ratio-although IRDA has set norms and rules for different insurers which makes them equally responsible for settlement of claims but still, there are varying ratios of claim settlement among different insurers. Insured may choose the company as per his risk appetite.

There is no doubt that the term plan is a very important aspect of your life’s long term financial planning. As women contribute towards the financial goals of the family, the term plan for women is equally important for men.

To ease it a little further, we offer you all the different companies’ term plans for a woman right here at easypolicy.com. Give us a call or ask for a callback and our life experts shall converse with you to understand your financial goals and share most suitable term plans within your budget.

LIC of India is offering its LIC Jeevan Labh Endowment Plan with great benefits.