What is Spouse Term Insurance?

In India, it is the common perception among people that all the financial burden of a family lies on their male members. This is one of the main reasons that generally a male member of the family opts for Life Insurance and his partner’s importance is often ignored. However, with the changing time, more women are now joining the workforce and are contributing to the household finances.

Now, with more households depending on the income of both spouses, everything such as lifestyle, loans etc, are planned based on their earnings. Consequently, the death or disability of any of the earning members can have a severe financial impact on the family. To protect a family from such scenarios, there is an increased need for having Spouse Term Insurance coverage.

Moreover, not just the working member, but it has now become a need of an hour to cover both husband and wife in an Insurance policy like Spouse Term Insurance so that they can protect themselves from the rising healthcare and living cost.

As the name itself suggests, Spouse Term Insurance or joint-life Term Insurance plan is a type of Term insurance that offers coverage to both husband and wife under a single policy. It is a comprehensive protection plan that shells out multiple benefits for you and your spouse.

With such plans, you and your partner can ensure that the future of your family is secured if either of you is not there.

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.

Can a Housewife/ Househusband Get Covered under Spouse Term Insurance?

Yes, a non working spouse can get covered under Spouse Term Insurance. Spouses who do not earn are no less, as they manage the house which allows earning members to work comfortably. Therefore, Life Insurers have made it possible for non earning spouses to avail the benefits of Term Insurance under Spouse Term Plans.

Need of Term Insurance for a Non-Working Spouse

A non-working Spouse has an equal contribution in running a house. A non- working Spouse runs errands which would otherwise be costlier in their absence.

In the absence of a housewife/ househusband, a domestic help comes into picture who charges substantial amount of money for activities like:

Cooking
Managing the house
Taking care of children

For example- a caretaker in a metropolitan area like Delhi (in the absence of a housewife/ househusband) would cost not less than Rs. 9,000 a month, which effectively means 81,000 a year & 4,05,000 for 5 years which can be counted as an added expense.

This clearly indicates that a non working spouse supports his/ her partner both financially & emotionally; and therefore, needs to be Insured & secured.

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.

Summing It Up

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.

Written By : Naval Goel

Last Updated : October, 2021

Naval Goel is the CEO & founder of PolicyX.com. Naval has an expertise in the insurance sector and has professional experience of more than a decade in the Industry and has worked in companies like AIG, New York doing valuation of insurance subsidiaries. He is also an Associate Member of the Indian Institute of Insurance, Pune. He has been authorized by IRDAI to act as a Principal Officer of PolicyX.com Insurance Web Aggregator.