Spouse Term Insurance
  • Cover your non-working Spouse
  • Reasons to opt for Spouse Term Insurance
  • Benefits of Including Spouse In Term Insurance Plan
Spouse Term Insurance
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Spouse Term Insurance: Term Insurance Plans for Husband & Wife

In India, over 55% of marriages have a husband who is the primary or sole breadwinner of the family. However, the conception that women should shoulder the household's responsibility is widely not held in most of India.

In today's modern society, about 16% of women become working professionals to reduce the burden on their spouses and family members. Nowadays, in a marriage, both the husband and wife are working, and the household is equally dependent on the income of both.

Cover your Family by term insurance Cover your Family by term insurance

So it's essential for couples earning household members to buy a spouse term insurance. It provides financial security to the surviving spouse and gives peace of mind to both spouses, knowing that they have taken steps to secure their family's financial future.

What is Spouse Term Insurance?

As its name suggests, spouse term insurance is an essential life insurance product to secure both earning household members under one plan. These comprehensive protection policies offer extra perks to the insured and his wife. In this way, a joint-term insurance plan provides financial protection for their spouse in case of their unexpected death.

However, this plan is designed to give both spouse's life equal importance. In case the insured person has debts, then this insurance can help make sure that those outstanding debts are paid off and do not burden the shoulders of the surviving spouse.

These plans come with an add-on rider, including critical illness cover, terminal illness cover, accidental death, and accidental permanent disability.

When Should You Buy a Spouse Term Insurance Plan?

A spouse term insurance plan is undoubtedly a perfect option for the family where both spouses work and contribute to the household equally.

As we know, with a husband and wife term insurance plan, the policyholder can secure the life of their family members, support them financially in his absence, or disability of either earning member. If you have kids or other dependents, like parents who rely on your spouse's income, a term insurance plan can provide financial protection in uncertain circumstances.

However, it's also worth considering buying a spouse term plan in case your spouse has any debts, including a home, personal or car loan, that you would be accountable for paying the offer in the event of their death.

Benefits of Having Spouse Term Insurance

Cost-Effective

Term plans are one of the affordable forms of Life Insurance. However, the premiums paid for an individual term plan is significantly higher as compared to the premiums payable on a joint term plan. Thus, as a couple, buying a Spouse Term insurance will be more economical.

Premium Waiver Upon Death

Having a Spouse Term Insurance allows the couples to avail of a waiver of Future Premium Benefit. It means that if the primary policyholder dies during the policy term, the surviving spouse will receive the whole sum assured as a death benefit, & he/she wouldn't have to pay future premiums to maintain the life cover.

Financially Secured Future of Children

In an unfortunate event where both the parents succumb to death during the policy term, the child will receive the sum assured as a lump sum or regular monthly income. This will ensure that your child can lead a financially independent life even in your absence.

Advanced Riders

To offer comprehensive coverage, Spouse Term Insurance comes with advanced benefits such as in-built Accidental Death Benefit and in-built Terminal Illness Benefit.

Avail Tax Benefits

Term insurance in India allows the policyholder to avail Tax Benefits under the Income Tax Act, 1961. Couples can avail of Tax Benefits under Section 80C and 10(10D) of the Income Tax Act, 1961.

Pros and Cons of Spouse Term Insurance

It is quite beneficial to purchase a spouse term insurance to secure the life of their family's financial future. Let us take a look at the pros and cons of spouse term insurance:

Pros:

  • It provides financial security for the surviving spouse and dependent in the event of uncertain circumstances.
  • Spouse term policies are more affordable than other life insurance products, making them an ideal option for newly married couples.
  • With the flexibility of selecting a sum assured amount, they can choose the sufficient funds they need based on their financial situation and future needs.

Cons:

  • It only provides coverage for a specific term, typically 10 to 30 years, and no maturity benefits if the insured spouse outlives the policy.
  • Unlike other life insurance products, spouse-term insurance policies do not accumulate cash value over time.
  • If any of you suffers from a pre-existing health condition, the premiums for the policy may be higher and vary from insurer to insurer.

How to Choose Best Term Insurance for Housewife

When it comes to buying the term insurance plan for husband and wife, there are a few key features that you must consider. Here, we've listed few tips that can help you choose the best spouse-term insurance plan:

Sufficient Coverage- It's essential to estimate the family's financial requirements and select a sufficient amount of coverage at the time of buying the plan. For instance, the family can consider any outstanding debts, loans, future goals, retirement plans, a child's higher education, etc. Make sure the coverage should be sufficient to manage the financial crises in the event of uncertain circumstances.


Health Condition- Before opting for a spouse term plan, both spouses should consider checking out their health condition and family medical history. It helps you to determine if a health rider is essential.


Look for the Claim Settlement Ratio- To obtain the financial benefits when the time comes, it is worth considering the reliability of the insurance provider. So make sure to compare the insurer's claim settlement ratio to evaluate their service and efforts to settle claims and compensate the claimants.

Things To Keep In Mind Before Buying Spouse Term Insurance

  • Same Terms & Conditions Under a Spouse Term Insurance, both the partners will follow the same terms and conditions. Therefore, if either of the partners wants to add or remove any feature, he/she has to purchase an individual plan as per his/her individual requirements.
  • Single Death Benefit Spouse Term Insurance generally offers only a single Death Benefit, and the policy expires after that. This means that if the surviving spouse wants to get any sort of life coverage, he/she will have to buy a new Term Life Insurance Policy. Moreover, buying a new life policy at a later stage may be costlier due to the age factor.
  • Premium Payment (In an unfortunate case of Divorce) In case a couple under the Spouse Term Insurance decides to get divorced, one of the partners will have to take the burden to continue paying premiums or the policy will lapse. This happens because a Spouse Term Insurance cannot be divided.
  • Determination of Sum Assured Sum Assured is determined by examining factors like Age, Lifestyle, Medical Condition & Income of the primary policyholder. Even if the factors vary for the second policyholder, the Sum Assured will depend on the profile of the primary policyholder only.

Need of Term Insurance for a Non-Working Spouse

Firstly, let's clear out the doubts of those who don't know about a nonworking spouse; the nonworking spouse takes care of the household, cooking, cleanliness, and child and ageing parents take care.

However, the difference between working and nonworking spouses isn't much. But the working spouse always gets a spotlight like a lead role due to the visibility offered by a promising career. Further, the nonworking spouse works in the shadows like a side actor who hardly gets appreciation for fulfilling responsibilities.

In India, term insurance for non-working spouses will be helpful as it makes sure a term insurance plan protects the family from a financial crisis in case of any unfortunate event. Even though they do not hold any income source, it might be unimaginable to account for the financial implication in case of their absence.

Conclusion

Buying any sort of insurance is your personal choice. However, in today's time when lifestyle costs are on the continuous rise, it is always recommended to be prepared in advance. Securing yours and your partner's future with a Spouse Term Plan can be one of the best gifts you can give to your better half.

Evaluate your requirements, your lifestyle costs and your child's future and then make a wise decision.

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Sahil Singh Kathait

Written By: Sahil Singh Kathait

Sahil is a passionate content writer with over two years of expertise in the insurance domain. He uses his knowledge in the field to create engaging content that the customer can relate to and understand. His passion lies in simplifying insurance terminology, ensuring a hassle-free understanding for potential policyholders. With his outstanding collaborative efforts with people, he understands different perspectives and keeps readers' viewpoints at the forefront of his content writing approach.