Why does every woman need life insurance to protect her family’s future? Key reasons explained

A woman’s financial journey is much like building a bridge over a river. She carefully lays each plank—education, career, savings, and investments—creating a strong path toward her goals. But what happens if an unexpected storm washes away a section of that bridge? Life insurance acts as the invisible support beneath, ensuring that even if life takes an unforeseen turn; the bridge remains intact for those who depend on her.

Yet, a significant portion of women in India, across both the working and non-working categories, are still without insurance cover. According to a recent report by Max Life and Kantar, 79% and 35% of working women have purchased life insurance and term insurance, respectively. In contrast, just 18% of women, who fall into the category of homemakers, have bought term insurance for themselves, showing the difference between the two groups.

One of the reasons for this imbalance is women’s underestimation of their worth – most women do underestimate their need for life insurance, believing that it is mostly for their husbands. This is far from the truth.

Why is life insurance important for all women?

The Max Life report indicates that a larger portion of working women are now realising their value and investing in life insurance to ensure that their family can overcome the financial challenges that may arise in an unexpected event. But homemakers also need life insurance. These women, although perhaps not contributing income to the household, are working on a full spectrum of responsibilities that influence the family finances in a very real manner.

For instance, the majority of homemakers operate a bevy of chores – from cleaning and cooking to laundry tasks, among a whole host of other things that comprise a well-oiled home. They also take care of their children’s educational and emotional needs, while being the home managers for their husbands. 

In addition, they also offer care and support to aging family members. When outsourced, each of these responsibilities has the potential to hike up the household’s expenses. 

In this scenario, life insurance for homemakers can cover the costs for childcare, household management and care-giving for elderly family members, in their absence. Accordingly, life insurance provides financial security for homemakers, ensuring that their contributions to the household are recognised and valued.

Undertaking effective insurance planning

Undoubtedly, having proper life insurance in place empowers homemakers to take control of their financial futures, thereby promoting independence and peace of mind for themselves and their families. So, how can women, including homemakers and working women, ensure that their insurance planning is optimal and will alleviate the financial burden on their spouse, in an eventuality? A human life value calculator is an excellent tool for insurance planning and here is how it can be leveraged efficiently.

In principle, a human life value calculator helps determine the monetary value of an individual’s life, based on their income, expenses, and future financial needs. Using this calculator can assist in identifying the appropriate amount of life insurance coverage needed to protect dependents, in the case of an untimely death. The calculator takes into account factors such as age, occupation, and family responsibilities, to provide a personalised insurance planning approach.

Let us consider the case of Sudha, who is a 35 year old homemaker in Mumbai, and a mother to two children, both under the age of 5 years. She manages all the household chores, in addition to caring for her children and her husband’s aging parents, making her contribution a hefty INR 40,000 per month, considering the expenses for a full-time nanny, nurse and maid in Mumbai. Using a human life value calculator, her life value can be calculated as follows –

1. Annual Household Contribution = ₹40,000 × 12 = ₹4,80,000

2. Future Value of Contributions Over 20 Years (with 6% inflation):

– After 1 year: ₹4,80,000 × 1.06 = ₹5,08,800

– After 2 years: ₹5,08,800 × 1.06 = ₹5,39,328

– After 3 years: ₹5,39,328 × 1.06 = ₹5,71,688

– … (continuing for 20 years – where 20 years is the time frame in which her young children would become financially independent)

– Total sum of future contributions = INR 1,76,57,083 (INR 1.77 crore approximately)

Therefore, Sudha’s final estimated Human Life Value (HLV) = ₹1.77 crore, meaning that her unexpected demise could put her family under an enormous financial burden, in addition to the emotional one.

Life insurance is more than a policy—it is the recognition of a woman’s value. Whether a working professional or a homemaker, her role is irreplaceable. Yet, many women remain uninsured, underestimating their financial impact. It is time for women to protect their worth—because their contributions matter, and so does their financial security.

Padmaja Choudhury is a freelance financial content writer. You can reach out to her at padmaja@padmajachoudhury.com.