How Term Insurance Helps Women Entrepreneurs Secure Loans?

Understanding Term Insurance

Let’s first understand what term insurance is. Term insurance is a life insurance policy that covers your life for a fixed/ predetermined number of years. That's why it is known as term insurance. Under this policy, the life assured is covered for the entire tenure. In case the life assured passes away during the tenure, the appointed beneficiary receives a death benefit.

If the life assured survives the tenure, the policy ends. Term insurance typically does not offer a maturity/ survival benefit. However, with the option of Term Return Of Premium (TROP), the life assured can receive the entire premium as a maturity benefit upon surviving the policy tenure.

Did you know term insurance is one of the most cost-effective ways to ensure financial security? It offers high coverage at affordable premiums.

Role of Term Insurance in Securing a Loan

Whether you apply for a loan with a bank or an NBFC, the lender would require repayment assurance. Term insurance for women entrepreneurs can significantly improve the chances of loan approval. Here’s how.

Building Credibility

Lenders will verify the credibility of the loan applicant. Certain factors may be taken into consideration, such as the applicant's credit history, CIBIL score, and repayment capabilities. In this context, a term insurance policy adds a layer of assurance. This sense of trust makes it easier for the lender to approve the loan.

Financial Safety for Lenders

Term insurance acts as a financial safety net for the lender. It assures that even if the borrower passes away before repaying the loan, the death benefit from the term insurance can be used to repay the outstanding loan amount.

Better Negotiation Power

With a term insurance policy, the applicant gets stronger negotiation leverage. Women entrepreneurs with term insurance would be considered lower-risk borrowers. They may be able to negotiate for flexible repayment tenure or lower interest rates.

An Alternative to Collateral

Not many entrepreneurs have access to substantial collateral. This is when term insurance becomes quite helpful. Women entrepreneurs can show term insurance as an alternative to collateral, increasing the chances of loan approval..

Dual Security

Term insurance for women offers dual security. It strengthens the business loan application while also protecting the entrepreneur’s family in the event of an unfortunate event.

Benefits of Term Insurance for Women Entrepreneurs

Women entrepreneurs can benefit from term insurance in multiple ways. Some of the highlighted benefits are discussed below:

Benefits of Loan Approval

A term plan provides the lender with financial security that the loan amount will be repaid even in the absence of the applicant. So, securing a loan becomes comparatively easier.

Continuity of Business

The term insurance policy payout can be utilised for the continuity of the business even when the owner is no longer around. The family and business people can rely on this amount for various business processes and capital requirements.

Financial Protection for the Family

Like most women, if you also prioritise the interests of your family, a term insurance plan can ensure financial stability for your dependents. The policy can cover daily expenses, education, and other commitments.

A Cost-effective Policy

Term insurance is a pure life cover. So, it is highly cost-effective when compared to various other life insurance policies.

Peace of Mind

Term insurance also gives you the much-needed peace of mind. Knowing that both business and family are financially safeguarded allows entrepreneurs to focus fully on growth.

Over To You

Term insurance for women is more than just a protective cover; it is a strategic financial tool that is important for your business as well as your family. If you are looking for term insurance for women, you can look for the most suitable term insurance plans with Jio Insurance Broking. You can compare and buy your preferred term insurance easily at Jio Insurance Broking. Get a life insurance cover today to secure the financial interests of tomorrow!