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Best Term Insurance Plan for Women - Group insurance or individual cover?

Term Plan for Women
May 13, 2019


In today’s world, women are at the vanguard of all economic activities and as such, form an important part and parcel of commercial productivity. Therefore, the importance of financial inclusion for women cannot be understated at any cost. When it comes to women's financial security, multiple factors have to be considered, including term insurance. A working woman may have dependent children or other family members, and their future stability is a major concern. For a working woman, term insurance may be either a group insurance cover or an individual one. Therefore, it is essential that proper care is taken while choosing either one of these as they have their respective pros and cons.

In actual practice, many corporate organizations offer group term insurance plans for their employees to safeguard their monetary strengths. Significant purpose of coverage is then offered at standard rates that are meant for the exclusive benefits of all employees. A group term insurance policy is a long term beneficial contract and all the employees are eligible for it from the time of their joining till they retire (the upper age capping is usually 70 years). Such a policy does not entitle the employee to any proceeds (sum assured) upon surviving the term but provides the payout of lump sum proceeds in the event of demise. The claim benefits are eligible for tax exemption under Section 10(D) of the Income Tax Act, 19611.

Why Do Women Need Term Insurance?

Women today hold positions of power at work and home. Their contribution to the family is significant, and if anything were to happen, it could negatively impact their family’s finances. Any sound family financial plan includes term insurance for women as it allows the family to safeguard their finances. Working women contribute funds to the family. Their earnings enable the smooth running of their household on a day-to-day basis. If anything were to happen to them, their family will lose vital income. Even women who choose to be homemakers contribute significantly. They take care of crucial responsibilities such as bringing up their children or looking after the elders and managing household finances. In case something happens to one of these women, their family will have to find a way to make up for their loss and this comes at a cost. With term insurance for women, working and non-working women can rest assured that their families will be taken care of, irrespective of what happens to them.

Benefits of Term Insurance

  • Financial Stability

    Nobody knows what life has in store for them. An accident could take you away from your family. A term plan allows you to provide your family with financial stability, irrespective of what the future holds for you.

  • Customised Cover

    You can pick a term insurance plan based on your specific needs and requirements. You can opt for a sum assured that works for you and even get add-ons and riders to bump up your cover.

  • Pick Your Payout

    Term plan policyholders have the unique ability to decide how they want their nominee to receive the payout. You can opt to have the money provided as a single, lump-sum payout. Or, you can ask your insurer to provide your family with monthly or annual payouts. You should base your decision on your family’s financial needs.

Top 3 Term Insurance Plans for Working Women

Women nowadays have achieved financial independence. They make executive decisions at home and work. However, they may not always have full control over their financial investments. Luckily, we’re here to help. If you’re looking to purchase a term plan for yourself and secure your family’s financial future, here’s a look at the top 3 term insurance plans for working women:

Term Plans with Maturity Benefit

Ideally, working women should opt for term plans that offer a maturity benefit. This way, if you happen to outlive the policy tenure, you will get a windfall of money that you can either invest again or spend as per your preferences. The maturity benefit will help you get back all the money that you paid as premiums for the upkeep of your term plan over the years. It’s a great way to save some additional money for your retired years.

Terms Plans with Critical Illness Cover

When looking for a term plan, you must choose an option that provides a payout if you are diagnosed with a critical illness. Most critical illnesses can be difficult to deal with financially. The treatment of a disease like cancer or diabetes could end up burning a huge hole in your pocket. With the right kind of term plan, you could get a payout from the plan if you were ever diagnosed with a covered critical illness. The money you receive from the payout will help you cover the cost of treatment while also replacing any lost income as you get treatment and recover.

Group Term Plans

Many employers today offer term insurance to their employees. These plans are incredibly affordable and while they do not offer maturity benefits, they do provide a lump sum payout to the nominee if anything were to happen to you. If your employer offers to cover you under such a plan, it’s always a good idea to agree. This is because this plan will provide additional support to your family members if anything were to happen to you. Of course, we would advise using a group term plan only as a supplementary insurance policy. You should always have another plan to keep you covered in case you decide to change your job or retire.

When viewed in comparison to an individual term cover, a group term insurance plan has added benefits. These benefits include:

  1. Group insurance cover:

    A group term insurance policy provides coverage to the entire group of employees, right from the moment they join the concern. This not only makes the whole operation secure and simple (owing to the centralized support system) but also helps in tax savings (as the premiums are deducted on salary, thus reducing the taxable salary component).

  2. Hassle –free and simple:

    Unlike individual insurance plans, a group term insurance policy does not require any mandatory medical check –ups or any profiling on the basis of health or any pre-existing condition.

  3. Comes with optional riders:

    A group term insurance policy comes with optional rider benefits that offer varied entitlements. These are – Accidental death benefit, disability benefit (total and partial), illness benefits (covers both critical and terminal illnesses).

  4. Is economical:

    Generally, a group term insurance policy is renewed annually and comes with a grace period (mentioned in policy documents). The employer can save on taxes as the premium payable towards the policy counts as a business-related expense. Thus, such a coverage option proves to be completely beneficial for the organization as well as the employees.

    HDFC Life offers  HDFC Life Click 2 Protect Life – an online term insurance plan that offers significant coverage to your loved ones at an affordable cost and flexible range of benefits.

Buy Term Plans

ARN - ED/01/22/27067

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.