Term insurance for homemakers: why it matters and how much cover

A homemaker has no salary slip, so it’s easy to think she doesn’t need life cover. But if she died, someone would still have to cook, clean, look after the children and care for older family members. That work would either cost money or cost the earning spouse working hours. Term insurance is one way to pay for that gap.

Unpaid work still has a price

The numbers are large. India’s Time Use Survey for 2024, released by the statistics ministry in February 2025, found that women aged 15 to 59 who did unpaid domestic work spent about 305 minutes a day on it, roughly five hours. Women who cared for family members spent about 140 minutes a day on caregiving, against 74 minutes for men.

Courts recognise this value too. In Kirti v Oriental Insurance (January 2021), a motor accident case, the Supreme Court said courts should fix a notional income for a homemaker when deciding compensation, rather than treat her work as worth nothing.

How insurers usually treat homemaker cover

Life insurers size cover mostly on income, and a homemaker has none of her own. So the common pattern is to link her cover to the earning spouse: insurers often look at the spouse’s income or the spouse’s own term cover, may limit her cover to a part of it, and may ask that the spouse be insured as well. Some look at total household income instead.

The exact limits aren’t set by a regulator. They come from each insurer’s board approved underwriting policy, so they differ from one insurer to the next. IRDAI’s 2024 master circular does ask life insurers to offer products for all ages, regions and occupational categories, as per people’s needs and affordability. If one insurer declines or offers too little, another may treat the same case differently.

How much cover makes sense

Price the work, as you would a salary. The method is the same needs-based approach as in how much term cover, with the cost of her work in place of income.

An illustration. Say the family would need paid help for cooking, cleaning and childcare at about 25,000 rupees a month, or 3 lakh rupees a year (made-up numbers). The youngest child is 5, so the help is needed for about 15 years: 3 lakh times 15 is 45 lakh. Add 10 lakh towards a child’s education. Subtract 5 lakh the family has already saved for these costs. That gives 45 + 10 minus 5 = 50 lakh rupees of cover.

This simple sum ignores inflation, which would push the cost of help up each year, and the interest the payout could earn, which would offset some of it. It’s a starting point, not a final answer.

Alternatives and add-ons

• The earning spouse’s cover. Some families add the cost of replacing the homemaker’s work to the earner’s own cover. That doesn’t protect against her death, so it isn’t a substitute, but it shows the gap clearly.
• Accident cover. Under IRDAI’s standard personal accident insurance product, Saral Suraksha Bima, a family cover gives each member the full chosen sum separately. The government’s PMSBY offers 2 lakh rupees of accident cover for 20 rupees a year. Both cover accidents only.
• Riders. A rider adds benefits to a term plan, within IRDAI’s limits. See term insurance riders.
• Health cover. A family floater health insurance policy pays her hospital bills, which life cover doesn’t.

Did you know? The 2024 Time Use Survey found that on a given day, 81.5% of women and girls aged 6 and above did unpaid domestic work for their household, against 27.1% of men and boys. In most homes, this is the work a term plan for a homemaker is really insuring.

The takeaway. A homemaker’s work is unpaid, but it isn’t free. Price what it would cost to replace, check how each insurer links her cover to the earning spouse, and fill any gap with accident cover and a clear nominee on every policy.

More to read: term vs endowment, the real cost, the health insurance guide, and the term insurance lesson.