Companies ease norms for term insurance for homemakers
Insurance companies are offering term insurance policies from Rs.25 lakh to Rs.75 lakh for a homemaker, independent of the insurance cover of the husband.
Hyderabad: Homemakers are finally getting their due. Insurance companies, which earlier shied away from offering term insurance policies to homemakers, are now rewriting their rules.
Earlier, a homemaker found it difficult to buy a term insurance policy, with companies failing to see the value in the contributions of homemakers to the home economy. They had put forth a condition that it should be bought by their earning spouse. Also, the sum assured was only 50 per cent of the policy value of the husband. Things have changed and now, insurance companies are offering term insurance policies from Rs.25 lakh to Rs.75 lakh for a homemaker, independent of the insurance cover of the husband.
Also Read
“Earlier a housewife or a non-earning member could be covered under Spouse Term Insurance. This way, the cover offered was 50 per cent of the value of the husband’s policy. With the new-age homemaker’s term plan, homemakers between 18-50 years can buy a term plan individually if the household income is Rs 5 lakh per annum,” Sajja Praveen Chowdary, Business Head – Term Life Insurance, Policybazaar.com, explained.
For instance, if the spouse has an annual income of Rs 5 lakh, the income multiplier is pegged at 15 times the annual income. He will be eligible for a total cover of Rs 75 lakh. Assuming he took a cover of Rs 50 lakh, the wife would have been eligible for only half the cover amount – Rs 25 lakh. If the husband took the full Rs 75 lakh cover, the wife would not be eligible to take any term cover basis the rules, he said.
“The recent launch of independent term plans for homemakers has widened the scope of coverage. They can be bought irrespective of the policy or income status of the husband. A homemaker must invest in a term plan that offers a sum insured of Rs.50 lakh to secure the financial future of the family in their absence,” he said.
For example, for a 30-year old female, housewife, non-smoker, the cover offered is Rs 50 lakh. Max Life Insurance has priced its policy (Smart Secure Plus) at Rs 556 per month, TATA AIA Life Insurance priced(Sampoorna Raksha Supreme) at Rs 724, Bajaj Allianz (Smart Protect Goal) at Rs 481 and Bharti Axa (Flexi Term Pro) at Rs 460.
Purchase of homemakers’ term plans has seen a 70 per cent increase between March and August this year, he said, adding that the industry was now acknowledging that the contribution of a homemaker was no less. The earning member was able to focus on the work responsibilities at hand while the partner at home was taking care of the responsibilities on the domestic front. The insurance companies too are able to sell high value policies to the earning member by virtue of their job and position, which would not have been possible without the support of the homemaker, he said.
