While many individuals understand the importance of insurance, there is often a misconception that only salaried individuals need it. However, unemployed women and self-employed individuals in India also need to consider purchasing a term insurance plan. Explored here are the reasons why term insurance for self-employed and women as important as any salaried individual.
Providing financial protection: Term insurance offers a valuable safety net by providing a lump sum payout to the policyholder’s beneficiaries in the event of their untimely demise. This financial protection ensures that the family members left behind are not burdened with financial hardships, such as mortgage payments, children’s education expenses, or daily living costs.
Meet Shanti, a self-employed entrepreneur from Chennai. She runs a successful boutique business and supports her family financially. By purchasing a term insurance plan, Shanti ensures that her husband and children will be financially secure even if something unfortunate were to happen to her. The policy’s payout can help cover the business expenses and provide a safety net for her family’s future.
Covering outstanding debts and liabilities: Unemployed women and self-employed individuals often have outstanding debts and liabilities, such as loans, mortgages, or business-related obligations. In the event of their demise, these debts can become a burden for their family members. Term insurance helps alleviate this burden by providing funds to settle such liabilities.
Consider Deepa, an unemployed woman from Bengaluru who has taken a home loan to purchase a house for her family. Although she is not earning now, she understands the importance of protecting her family’s financial interests. Deepa opts for a term insurance plan that covers the outstanding loan amount. This ensures that her family will not have to worry about mortgage payments and can continue to enjoy the security of their home.
Income replacement for dependents: The loss of income can be particularly challenging for unemployed women and self-employed individuals who are the primary breadwinners of their families. Term insurance acts as an income replacement tool, providing financial support to dependents and ensuring their quality of life remains intact.
Meet Meena, a self-employed freelance writer from Hyderabad. She supports her elderly parents and younger sibling. Recognizing the importance of securing their financial future, Meena invests in a term insurance plan that offers a substantial payout in the event of her demise. This payout acts as a source of income replacement, allowing her family to maintain their current standard of living and meet their day-to-day expenses.
Business continuity and succession planning: For self-employed individuals, their business often serves as a significant source of income. In the unfortunate event of their demise, the business may suffer, leading to financial instability for their family and employees. Term insurance can help ensure business continuity by providing funds for necessary expenses and facilitating a smooth transition or succession plan.
Consider Saraswati, a self-employed interior designer from Kochi who runs her own design firm. Saraswati realizes the importance of protecting her business and securing her family’s financial future. She purchases a term insurance plan that covers her business liabilities and provides funds for the business to continue its operations in her absence. This allows her family to benefit from the continued success of the business and maintain financial stability.
Child’s education and future planning: Unemployed women and self-employed individuals often aspire for their children’s education and future. Term insurance can help fulfill these dreams by providing financial support for their children’s education expenses and other long-term goals.
Meet Lakshmi, an unemployed mother from Coimbatore. Despite her current situation, Lakshmi wants to ensure that her daughter, Ananya, receives a quality education. Lakshmi purchases a term insurance plan that specifically allocates a portion of the payout towards Ananya’s education fund. This ensures that Ananya’s educational aspirations are not compromised, and she can pursue her dreams.
Protecting business partnerships: For self-employed individuals who have business partners, term insurance becomes crucial to protect the business and its stakeholders. In the event of the demise of a partner, the term insurance payout can facilitate a smooth transition, buy out the deceased partner’s share, or provide financial stability to the business.
Consider Ramesh and Suresh, two self-employed software developers from Chennai who have formed a partnership. They understand the importance of safeguarding their business and decide to purchase term insurance policies on each other’s lives. If one of them passes away, the surviving partner can use the insurance proceeds to buy out the deceased partner’s share and ensure the business continues to thrive.
Protecting dependent parents: Unemployed women and self-employed individuals often support dependent parents financially. Term insurance can provide an additional layer of protection to ensure the well-being of their parents in case of any unfortunate events.
Meet Kavitha, a self-employed graphic designer from Hyderabad. She takes care of her elderly parents and wants to ensure their financial security. Kavitha purchases a term insurance plan that covers her life and designates her parents as beneficiaries. This ensures that her parents will have financial support even after she is no longer there to provide for them.
Building a financial legacy: Term insurance can serve to leave a financial legacy for unemployed women and self-employed individuals. By naming beneficiaries, they can ensure that their loved ones receive a substantial payout, helping them achieve their own financial goals or secure a better future.
Consider Radha, an unemployed entrepreneur from Bengaluru who has built a successful business. Although she does not have a regular income, Radha wants to leave a financial legacy for her children and grandchildren. She purchases a term insurance plan and designates her family members as beneficiaries. This ensures that her hard-earned wealth will be passed down to future generations, providing them with opportunities and financial security.
Conclusion:
In India, unemployed women and self-employed individuals play significant roles in their families’ financial well-being. It is essential for them to consider purchasing a term insurance plan to ensure the financial security of their loved ones. By providing a lump sum payout, term insurance covers outstanding debts, replaces lost income, and supports business continuity. Through the examples of Shanti, Deepa, Meena, Saraswati, and others we can understand the real-life significance of term insurance for women and self-employed individuals.
It is strongly recommended to encourage women and entrepreneurs to prioritise their family’s financial security and consider investing in a term plan. With the right term insurance coverage, they can gain peace of mind, knowing that their loved ones will be protected even in the face of adversity.