Life insurance: Joint life plan ensures financial security for surviving spouse | The Financial Express

Life insurance: Joint life plan ensures financial security for surviving spouse

Maturity claim sum on the homemaker’s life is a big help in old age

Life insurance: Joint life plan ensures financial security for surviving spouse
The maturity claim amount on the life of the homemaker can give her a fresh lease of life.

It is a wrong notion that a family is fully insured when the breadwinner’s life is insured. The logic is, in case of death of a breadwinner, the lost future income is replaced by the life insurance policy. However, there are reasons why homemakers need life insurance cover.

When a homemaker grows quite old, there may be no one to look after her. The problem becomes more acute when the husband has expired long back, leaving not enough money for the sustenance of his wife after 20 or 25 years. The maturity claim amount on the life of the homemaker can give her a fresh lease of life.

Maturity claims
A life insurance policy on a woman’s life does not just benefit the family in case of untimely demise of the woman but can also help the woman in getting some valuable money as maturity claim proceeds when she survives the policy term. So, this is another layer of financial protection for the woman to live honourably in old age.

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After all, it is the responsibility of the breadwinner to buy adequate life insurance for his wife, so that the financial future of the housewife is secured. Preferably, such insurance policies for women should be limited payment endowment type, so that almost all premiums are paid when the husband is alive and working actively. The better option will be to buy a single premium endowment policy and discharge the responsibility in one go.

Joint life plans
Joint life plans offered by many insurers is the best option. The homemaker gets a lumpsum money on the death of her husband and another lumpsum on the maturity date. There is a waiver of premium payment as soon as one partner dies. A life insurance policy which has add-on benefits like permanent disablement riders and health insurance riders can help a family tide over financial difficulties arising from permanent disablement of a housewife following some grievous accident or critical disease like cancer requiring costly medical treatment for a protracted time. There are also some women-specific plans which enable the family to get insurance cover to meet women-specific health expenses.

A few things, however, should be kept in mind while buying insurance on the life of housewives. Since there have been instances when unscrupulous family members have forced a married woman to commit suicide or even murdered housewives with the police unable to unearth the real facts behind these unnatural deaths, the insurers have become cautious while entertaining proposals on the lives of women. For example, LIC still imposes a clause under which claims are not acceptable if death occurs at the residence of the insured due to suicides, self-inflicted injuries and accidents within first three years of the policy.

The writer is an insurance industry analyst

Insuring women
Limited payment endowment plans are best for homemakers as premiums are paid when the husband is alive
An insurance plan on a woman’s life with add-on riders can help if she later falls critically ill or becomes disabled

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