Earlier this week, Max Life Insurance rolled out an independent term plan for homemakers. The company extended the scope of their Max Life Smart Secure Plus Plan, a pure vanilla life insurance cover plan for individual policyholders, to homemakers. The policy can be bought by homemakers in the age group of 18 to 50 years and whose household income is ₹5 lakh and above. Max Life refused to answer Mint’s query about the maximum coverage that will be provided to homemakers under this policy. Different variants of the plan, with mortality and rider benefits, will be available to homemakers. But despite such lucrative offerings, the actual question to ask is whether homemakers, who do not carry much financial risk, need to buy term insurance at all.
What’s on offer: Most insurers offer term cover to homemakers as an add-on to their earning spouse’s cover. Such plans are called spouse insurance, said Sajja Praveen Chowdary, head-Term Life Insurance, Policybazaar.com. “These policies ensure that the family is protected if either of the policyholders dies. Most policies of this kind, however, have a higher sum assured for the primary policyholder, the earning member in this case, compared to the secondary policyholder, the homemaker,” he said. Insurers typically cap the cover for the non-earning member at ₹40-50 lakh.
Prashant Tripathy, managing director and chief executive officer, Max Life Insurance said until now, homemakers could not buy term insurance for themselves without their spouse’s insurance coverage (spouse’s life being also covered) and that the minimum requirement for spouse insurance was that the husband’s income is above ₹ 10 lakh.
Should you buy?
Any homemaker should ask themselves one question before taking the call–will my family have enough financial resources to maintain the same lifestyle in my absence?
“The absence of a homemaker can result in increased net household expenditure with respect to the cost of managing the home and children. This is besides any cash income (probably unaccounted) that the homemaker was earning. If the remaining family members can financially absorb this additional financial burden, then there wouldn’t be any need for term insurance,” said Mahavir Chopra, co-founder and CEO, Beshak.