Term insurance is upto 30% cheaper for women. Here is why?

Term insurance provides a two-fold advantage. It is both the most affordable and offers the highest sum insured. As a pure protection policy, it pays out a lump sum to the policyholder's family in the event of their death. Terms plans do not have any investment component such as those found in unit-linked, guaranteed, or traditional plans.

A notable aspect of term insurance is that it can be up to 30 per cent less expensive for women. This is primarily due to the fact that women generally have a longer life expectancy than men. “Indian females’ life expectancy is on average 2.5 per cent higher than their male counterparts. This means the longer a person lives, the better it is for insurance companies as the risk and the probability to make a claim is lower. So, with higher life expectancy, women can get term insurance at a lower premium than men of the same age. On average, term insurance turns out to be 15 per cent cheaper for women than men,” says Rhishabh Garg, Head - Term Life Insurance, Policybazaar.com.

The premiums paid towards a term insurance policy are eligible for tax deductions under Section 80C of the Income Tax Act. Additionally, the death benefit paid to the beneficiaries is tax-free under Section 10(10D). “Working women can also maximise tax savings under Section 80C for a deduction of up to Rs 1.5 lakh. In a post-covid world, having term insurance is the best investment women can make to secure the future of their family. Even then, women make up a tiny portion of the total insured people in the country. With the new kinds of term plans available for both working and non-working women, there is no reason why women should not buy term insurance,” says Garg.

Term insurance policies generally have lower premiums compared to other types of life insurance policies. This makes it a cost-effective option for those who want to ensure financial protection for their loved ones. Term plans come with various tenures, ranging from 5 to 30 years or more. 

During the peak of Covid-19 young and old population was getting severely infected, throwing decades-old mortality estimates of life insurers under the bus. This led to a sharp rise in the premium rates of term insurance plans.  However, now that we are returning to normal life post-covid, claim ratios of life insurers have stabilised, which means no sharp increase in premium rates are expected this year.