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Spouse Term Insurance: Term Insurance Plans for Husband & Wife

Spouse term insurance plan provides coverage to the partner if the insured partner passes away unfortunately during the policy term.

  • 7,478 Views | Updated on: May 13, 2024

While words of affection bring us joy, it is the small unsaid actions of care that show the true nature of our emotions. You can do the same for your partner by purchasing term insurance for couples.

Key Takeaways

  • Spouse term insurance plans offer joint coverage for both partners, providing financial protection in the event of either spouse’s death during the policy term.
  • These plans are customizable to fit your specific financial needs, offering flexibility in coverage amounts and term lengths.
  • Spouse term insurance often comes with competitive premiums and tax benefits, making them a cost-effective option for couples.
  • Investing in a spouse term insurance plan provides peace of mind, ensuring that your loved ones are protected and financially secure.

People value the eternal bond of marriage - the thought of having someone with whom you can share your joys and sorrows for the rest of your life seems beautiful and reassuring. Having term insurance for husband and wife strengthens this bond by showing how much you care for your partner. You might ask what is spouse cover in term insurance, or term insurance with spouse cover, let us understand.

About Spouse Term Plan Cover

You can safeguard your partner as well as yourself with a spouse term insurance plan or a joint life cover for your spouse. In this manner, you and your spouse would be covered against life’s eventualities via a single life insurance policy. A spouse term insurance plan is tailored in a way that is convenient for both working couples as well as those with one spouse who is a homemaker (with the option of term insurance for housewives).

What is Spouse Term Insurance?

Spouse term insurance is a type of life insurance policy that provides a death benefit to the partner if the insured passes away during the policy term. It is a policy designed to ensure that the surviving spouse is financially stable and can take care of their needs, such as paying off debts, mortgages, and other expenses.

A term plan with spouse cover works by paying a premium to the insurance company, and in return, the company provides coverage for a set term. If the insured passes away during this period, the death benefit is tax-free to the surviving spouse. The benefit amount can range from a few hundred to thousands, depending on the policy’s coverage and the insured’s needs.

How Does Term Life Insurance for Couples Work?

Term life insurance for couples works by providing financial protection for both spouses within a single policy. Typically, the couple purchases a joint-term life insurance policy, which covers both individuals under one plan. If either spouse passes away during the policy term, the surviving spouse receives the death benefit. Premiums are usually based on factors such as age, health, and the desired coverage amount. Spouse term insurance plans offer convenience, potentially lower premiums compared to separate policies, and shared benefits for both partners.

Key Features of Spouse Term Insurance Plans

Spouse term insurance is essential for both partners. It allows you to cover the expense in case one of the partners is not around anymore. It is important to understand the key features of spouse term insurance plans, let us take a quick look:

Joint Coverage

Spouse term insurance plans provide coverage for both partners under a single policy, simplifying the insurance process and ensuring comprehensive protection for the couple.

Flexible Term Options

These plans typically offer a range of term lengths to suit different financial goals and timelines, allowing couples to choose the duration that best fits their needs.

Death Benefit

In the case of the death of either spouse during the policy term, the surviving partner receives the death benefit, providing financial support during a difficult time.

Premium Affordability

Spouse term insurance plans often come with competitive premiums, making them a cost-effective option for couples compared to purchasing separate policies for each partner.

Customizable Coverage

Couples can customize their coverage amount for spouse term insurance, based on factors such as income, financial obligations, and future needs, ensuring adequate protection for their loved ones.

Convertibility Options

Some plans may offer the flexibility to convert the term policy into a permanent life insurance policy, providing long-term protection and investment opportunities.

Benefits of Spouse Term Insurance Plans

Spouse term insurance plans offer invaluable financial security and peace of mind for couples by providing comprehensive coverage for both partners under a single policy. These plans not only safeguard against the uncertainties of life but also come with a range of benefits tailored to the unique needs of couples. Let us take a look at the various benefits of these plans:

Pinching Pennies on Premium Expenses

While term life insurance premiums are affordable, the cost of two separate policies is more than the price of a single joint life cover insurance plan for husband and wife. As a result, spouse term insurance plans covering two people are perfect for couples.

Tax Incentives

Under the Income Tax Act of 1961, the principal cost of a consolidated term life insurance, along with the advantages offered under the plan, is eligible for deduction for both parties. Couples can enjoy the tax benefits under Section 80C.

Waiver of Term Plan Premiums in the Event of Death

Couples can save money on future premiums by purchasing joint-term insurance. If the principal insured dies within the term of the policy, the surviving spouse shall collect the lump sum guaranteed as a death benefit and, therefore, will not be required to pay any future premiums to retain the life insurance coverage.

Ensure Children’s Financial Security

If the parents die within the policy period, the children, as beneficiaries, will receive the amount guaranteed in the form of a fixed monthly income or a lump sum payment. Spouse term insurance plans would assist the dependents in meeting their financial commitments and ensuring their monetary security in the future.

Keep Your Loved One’s Lifestyle Intact

If both partners work, the family will be entirely dependent on their money for financial requirements. Term insurance will enable your loved ones to maintain a quality lifestyle even after the policyholder’s untimely death.

Inclusions and Exclusions of Couple Term Insurance Plans

Understanding the inclusions and exclusions of couple term insurance plans is essential to make informed decisions about coverage. Inclusions and exclusions of couple term insurance plans are:

Inclusions

  • Joint Coverage: Couple term insurance plans typically cover both spouses under a single policy, providing a death benefit to the surviving spouse if either partner passes away during the policy term.
  • Death Benefit: The policy pays out a predetermined sum assured to the surviving spouse in the event of the death of either partner, providing financial support during a difficult time.
  • Customizable Coverage: Couples can often customize their coverage amount based on factors such as income, financial obligations, and future needs, ensuring adequate protection for their loved ones.
  • Optional Riders: These insurance plans offer optional riders that allow couples to enhance their coverage with features such as accidental death coverage, critical illness coverage, or disability benefits.

Exclusions

  • Suicide Clause: Most term insurance plans have a suicide clause that excludes coverage for death by suicide within a specified period after the policy’s inception, typically one or two years.
  • Pre-existing Conditions: Some policies may exclude coverage for pre-existing medical conditions or may impose waiting periods before coverage takes effect for certain health-related issues.
  • Misrepresentation: If the insured individuals provide false or misleading information during the application process, the insurer may deny coverage or void the policy.
  • Illegal Activities: Death resulting from engaging in illegal activities or acts of war may be excluded from coverage under the policy.

Why Should You Buy a Spouse Term Insurance Plan?

There are many reasons that would motivate you to buy a spouse term insurance plan. Let us take a closer look at those reasons:

Protects The Family’s Financial Future

Homemakers may not have a source of income, but they contribute significantly to the family’s overall financial well-being. In the event of their unexpected demise, the family may face financial difficulties due to the loss of their services. A term insurance plan can provide a financial safety net for the family and ensure that they can continue to meet their daily expenses without any worries.

Covers Medical Expenses

In addition to their household duties, homemakers often take care of the family’s medical needs. A term insurance plan can cover medical expenses in case of a critical illness or disability, providing financial support when it is needed the most.

Tax Benefits

Term insurance plans also offer tax benefits under Section 80C of the Income Tax Act. Homemakers can claim tax deductions of up to ₹1.5 lakhs on the premiums paid towards their term insurance plans.

Peace of Mind

Finally, a term insurance plan can provide homemakers with the peace of mind that comes with knowing that their family will be taken care of even if they are not around. It can help them feel secure about their family’s financial future and ensure that they can continue to provide for their loved ones even after they are gone.

Points to Consider Before Buying a Spouse Term Insurance Plan

By carefully considering certain points before buying a spouse term insurance plan, you can ensure that you select a policy that meets your family’s financial protection needs:

Financial Needs

Evaluate your financial obligations, including debts, mortgage, and future expenses, to determine the appropriate coverage amount for both spouses.

Term Length

Consider the term length of the policy based on your financial goals, such as the duration of your mortgage or until your children become financially independent.

Premium Affordability

Compare premiums from different insurers to find a plan that offers adequate coverage at a cost that fits your budget.

Insurer Reputation

Research the insurer’s financial stability, customer service reputation, and claims settlement record to ensure reliability and peace of mind.

Coverage Options

Review the policy’s inclusions, exclusions, and optional riders to customize your coverage according to your specific needs and preferences.

Convertibility

Check if the policy offers the option to convert to a permanent life insurance policy in the future, providing flexibility as your financial needs evolve.

Policy Terms

Read the policy terms and conditions carefully, including renewal options, exclusions, and any limitations, to fully understand the coverage provided.

Tax Implications

Consult with a tax advisor to understand the tax implications of spouse term insurance premiums and death benefits in your jurisdiction.

Future Planning

Consider how changes in your family situation, such as the birth of children or changes in income, may impact your insurance needs over time.

Wrapping Up

Investing in a spouse term insurance plan is essential for financial security and a symbol of commitment and care you have for your partner. By ensuring comprehensive coverage for both spouses under a single policy, you safeguard your family’s future against life’s uncertainties. Whether you are a working couple or have a homemaker spouse, the benefits of spouse term insurance plans extend far beyond financial protection, offering peace of mind and stability in the face of adversity.

FAQs on Spouse Term Insurance


1

Can a non-working spouse apply for spouse term life insurance?

Yes, a non-working spouse can typically apply for spouse term life insurance, subject to the insurer’s eligibility criteria.



2

What exactly is spouse term insurance?

A spouse term insurance is a policy that provides a death benefit if the insured spouse passes away during the term of the policy.



3

Is getting term insurance for a couple more cost-effective?

Getting term insurance for a couple can be more cost-effective compared to separate policies, as it often involves lower premiums.



4

Can a housewife get term insurance?

Yes, a housewife can typically get term insurance, provided she meets the insurer’s requirements.



5

Can I include my wife in my spouse term insurance policy?

Yes, you can include your wife in your spouse term insurance policy to provide financial protection for her in case of your death.



6

Can husband and wife take term insurance together?

Husband and wife can indeed take term insurance together, which can offer comprehensive coverage for both spouses.



7

What is joint-term life insurance for husbands and wives?

Joint-term life insurance for husbands and wives is a policy that covers both spouses under a single plan, offering shared benefits.



8

How does spouse term insurance work?

Spouse term insurance works by providing a death benefit to the surviving spouse if the insured spouse dies within the policy’s term.



9

What advantages does a joint-term life insurance plan offer to couples?

A joint-term life insurance plan offers advantages such as simplified management, potentially lower premiums, and shared benefits for both spouses.



10

How much life coverage should I consider for my spouse’s term life insurance?

The amount of life coverage for spouse’s term insurance depends on factors like financial obligations, lifestyle, and future needs.



11

What is a spouse term rider on life insurance?

A spouse term rider on life insurance is an additional feature that allows you to add coverage for your spouse to your life insurance policy.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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