Term insurance tailored for her

Term insurance offers the highest life cover at the lowest cost. However, despite its importance, penetration remains low as many people expect a maturity benefit from it. Eligibility is strict as well. One must have a steady income and be in good health to qualify.

In an attempt to broaden the appeal of term insurance, companies first opened it to homemakers, who were otherwise excluded for lack of income. Now, they are experimenting with women-specific term plans.

To broaden appeal, companies are now experimenting with women-specific term plans, opening access to homemakers otherwise excluded for lack of income. Only two such products exist currently—Bajaj Life Superwoman Term and Tata AIA Shubh Shakti.

“We have seen a sharp rise in women purchasing term plans. Today, one in five customers on our platform is a woman, up from one in 10 five years ago. This is driven by greater awareness and financial independence," said Varun Agarwal, head of term insurance at Policybazaar.

Interestingly, women enjoy 5-10% lower premiums across insurers, but few are aware of this benefit. “They get an upfront discount because their mortality risk is lower than men’s. For instance, a 25-year-old woman pays the same premium as a 22-23-year-old man," said Maneesh Mishra, chief product and marketing officer, Bandhan Life.

Women-specific term plans too come with this discount. The discount is automatic when you buy it as per your age and gender, without needing to be requested. “Some companies offer a three-year setback in age, others two. For us, it is three," Mishra added.

Why do we even need women-specific term plans when the premiums are often comparable to regular term plans? Before we evaluate whether they’re worthwhile, let’s first take a look at what they actually offer.