Term Insurance for Self-Employed Women: What Insurers Don’t Tell You

As more and more women join the workforce, they are gradually emerging as partners in financial contribution and all economically related activities for a family. This has enhanced the need for financial security for women themselves and proper future planning. Especially for self-employed ones like freelancers, entrepreneurs, consultants and small business owners. The women in these categories are often underserved and misinformed about the fact that a term insurance for the self-employed can act as a powerful armour for their families in times of distress. In fact, a 1.5 crore term insurance plan can be an ideal investment for your family’s financial security.

What is a Term Insurance Plan?

Term insurance plans have become synonymous with the concept of protection, as they have no investment component and are used only by the survivors after the demise of the policyholder. The entire sum assured is paid out to the beneficiaries along with some bonuses (if any) only on the death of the policyholder.

The key benefits of term insurance for self-employed women are:

1. Affordable and low-cost premiums against high coverage. An optimal coverage offers a wholesome financial protection without the pocket pinch.
2. Fixed coverage, which continues for a long tenure of almost 20-30 years.
3. For a business owner with dependents, business continuity becomes crucial even in his absence. In case of premature death, the financial needs of both the business and the family need to be taken care of. The funds will help your family to take over and run the business successfully, along with other immediate financial requirements.
4. The icing on the cake is the tax benefit that the beneficiary will get on payment of the coverage amount.
5. For self-employed women, it may often require taking out a loan for the initiation or expansion of the business. Term plans act as an emergency fund till the loan amount is paid off. A 1.5 crore term insurance plan, considered a high-value term insurance plan, best manages your debt situation while effectively supporting the well-being of your family.
6. Sometimes, along with term insurance, riders like critical illness coverage are also offered, especially for women, for coverage of terminal illnesses like cancer.
7. For self-employed women, if term insurance policies with return of premiums are chosen, it also takes care of their retirement planning by returning the premium amounts paid at the end of the policy term.

What Insurers Don’t Tell You?

For a self-employed woman requiring a high coverage plan, like a 1.5 crore term insurance plan, certain essential points need to be factored in:

1. You will be required to show a stable income proof like Income Tax returns, audited financial reports and bank statements to establish your source of income as well as the consistency. Extra documents may also be required on a case-by-case basis in case your income is seasonal or inconsistent.
2. The premiums for term insurance for self-employed women are usually affordable if all parameters, like age, income, and dependents, are within a limit. But an increment of premium may happen with higher age, unsteady income and also if the occupation falls under a high-risk category.
3. Any term insurance plan with high coverage comes with a thorough medical check-up pre-issuance. For self-employed women, there may be a hike in premiums if any pre-existing condition, like hypertension, diabetes etc., is flagged.
4. Do not go for additional riders like critical illness or accidental deaths, or even a premium waiver if it does not suit your needs. These features tend to increase your premium substantially.
5. Last, but not least, keep your documentation clear and transparent. File your returns, keep all records of your medical bills, and update your bank accounts diligently. It helps your family to prove your financial profile during claim settlement to make the process smooth and hassle-free.

Tips to Secure the Right Term Plan for Self-Employed Women

You need to consider these important aspects while applying for a term plan, especially if you are a self-employed, independent woman:

1. Do spend some time checking and comparing different plans across markets for a better and competitive premium rate. Some providers may offer rebates to women as well. Choose one that will suit your income consistency and affordability for a minimum of 20-30 years.
2. For enhanced protection as per your needs, look for a plan that is comprehensive and can accommodate add-ons and optional riders within an affordable premium. Do remember that continuity and consistency in payments are key for a term plan to enjoy its full benefit.
3. A company with a higher percentage of claim settlements is more likely to give a death benefit to your family without additional hassles.
4. Finally, the ease of purchase of term plans and the accessibility of the provider should also be considered during the decision-making.

Final Word

If you are an independent woman juggling family and business to earn that extra financial comfort for your family, a term insurance for the self-employed is an ideal investment for comprehensive coverage at an affordable price. Many experts recommend choosing a coverage of 10-15 times your annual income, and hence, a 1.5 crore term insurance plan may be ideal for you. However, do take an informed decision based on your income, age, dependency and other crucial requirements.