Spouse Term Insurance Plan
A spouse term life insurance plan allows you to include your spouse in your term insurance coverage. With this term insurance plan, your family will have financial protection against the uncertainties of life. Moreover, a term insurance plan with a spouse is designed to include a working spouse and the spouse who is a homemaker.
The term insurance plan is beneficial as it covers the non-working spouse who otherwise might not be able to buy a term plan with ease. The spouse term life insurance plan makes it easier for you to track premium payment, policy benefits, and other services under a single policy rather than two separate policies. It can also be referred to as housewife term insurance as homemakers can be included in this plan.
What is Spouse Term Life Insurance Plan?
As the name suggests, a spouse term life insurance plan provides both husband and wife coverage under a single policy. A spouse term insurance plan offers many benefits, including tax-saving benefits, discounts, long policy tenure, etc.
Under the spouse term insurance plan, you can also opt for additional coverage in the form of riders like critical illness rider, permanent disability, accidental death, and dismemberment, etc. Thus, buying a term plan with a spouse can be beneficial to you in many ways.
Benefits of Term Insurance with Spouse Cover
Including your spouse in your term insurance plan has many benefits. With this plan, you can choose multiple options for payment and multiple options for receiving the benefits. Other benefits of the plan include:
Under the term insurance with spouse cover, you can opt for policies that offer higher sum assured to the beneficiaries. You can choose policies that have a pay-out for both the spouses and not just one. Even if one spouse dies within the policy term, and the beneficiary receives the sum assured, the other spouse would continue to have coverage within the same policy. So, the beneficiary will get the sum assured when the other spouse dies. It is beneficial to read the policy document to know whether the policy will continue if the primary insured dies.
One of the major benefits of buying a joint term insurance plan for husband and wife is that the premium is comparatively cheaper than two separate term life insurance policies. The cost of paying premiums on two different policies will be higher than paying a premium for one insurance plan. This will help you save money, and it is a great option for people on a budget.
One thing that people worry about while buying a policy is the paperwork that goes towards it. Buying two separate policies can mean additional paperwork and can take more time. Getting your spouse insured under the same policy means lesser documentation and more convenience. Additionally, if you buy a joint term insurance plan, the terms and conditions remain the same for both the policyholders, so you need to read the information only once, which can save time.
Replacement of Income:
With the joint term life insurance policy, you have the option to choose from multiple pay-out options. You can choose the amount to be paid in a lump sum to the beneficiary, or the amount can be paid in monthly instalments. The monthly instalments will help the beneficiary plan their finances and provide a steady flow of income.
During an unfortunate incident, if one of the spouses dies, the surviving spouse will receive the death benefits. This will help them manage their expenses and maintain their standard of living. The benefit can be received in a lump sum or as monthly instalments and will help you manage your expenses.
The premiums you pay towards the policy are eligible for tax deductions under Section 80C of the Income Tax Act. Apart from this, the death benefit that the beneficiary might receive is also exempt from tax under Section 10 (10D). *
*Tax benefits are subject to changes in the tax laws.
Thus, some of the benefits that a couple can get if they opt for a joint term insurance plan for husband and wife. When you plan to buy a plan, you can take these benefits into account and choose a plan that suits your requirements.
Joint Term Insurance Plans vs Separate Term Insurance Plans
Joint term insurance plans cover both husband and wife under a single plan, whereas separate term insurance plans are individual plans for both husband and wife. There are some major differences between the two that you must know about. These differences include:
|Joint Term Insurance Plans||Separate Term Insurance Plans|
|The policy provides life cover to husband and wife (couple).||This policy provides life cover to two individuals.|
|The same terms and conditions apply to both the individuals covered under the policy.||Individuals can customize the policies according to their requirements.|
|If both die at the same time, the beneficiaries will receive the benefits stated under the plan.||If both die simultaneously, the beneficiaries will receive the benefits stated under each individual's plans.|
|You might not have many options when it comes to riders in a joint term insurance plan.||You can choose a rider as per your budget and requirements.|
|The policy might be affected in case the husband and wife choose to file for a divorce.||In a divorce, the policy will not be affected as both individuals are covered under separate policies.|
|This is cheaper as a single premium payment has to be made towards the plan.||This is expensive as both the individuals have to pay separate premiums for each of the policies.|
Thus, there are some differences between joint term life insurance plans and separate term insurance plans. After careful consideration, you can choose a plan that suits your needs and budget.
How Does Joint Term Life Insurance Plan Work?
A joint term life insurance plan is great for people who have a non-working spouse. Under this plan, both the husband and wife can be covered under the same plan. The working of the plan includes the following:
- The joint term life insurance plan works on the first death basis
- According to the plan, if one of the insured dies during the policy tenure, the surviving partner will receive the death benefits in a lump sum or monthly instalments
- If, in an unfortunate circumstance, both the insured's die simultaneously, the sum assured is given to the beneficiary as a death benefit. The payment can be done as a lump sum or in monthly instalments.
- Most insurance companies provide coverage of up to half of the sum assured to the spouse in case of the demise of the primary policyholder.
Who Should Buy Joint Life Insurance?
Ideally, people with a dependent spouse should buy a joint life insurance plan. It is an affordable insurance policy that covers you and your spouse by paying a single premium. It is also an effective way of buying insurance for your wife if she is a homemaker. Also, insurance companies have a wide range of policies with affordable premiums available, so you can choose one that suits your needs.
Young couples planning a family can also benefit from buying term insurance for husband and wife as the premium rate is lesser than what you pay for two separate policies. Moreover, it requires lesser maintenance and a single premium need to be paid to cover both the husband and wife.
Documents Required for Buying Life Insurance Policy?
To buy a joint term insurance plan for husband and wife, you need to submit essential documents. These documents generally include the following:
- Identity proof like Voter ID Card, passport, Aadhaar card, driving license, PAN Card, etc.
- Proof of age like PAN Card, Aadhaar Card, Voter’s ID Card, birth certificate, etc.
- Proof of marriage like marriage certificate
- Address proof like driving license, rent agreement, property deed, utility bills, Aadhaar card, passport, etc.
- Proof of income like salary slips for last 3-6 months, ITR for last 2-3 years, last six months bank statements, form 16, etc.
- Insurance application or proposal form
- A final declaration stating that the provided information is true and that the insurer has a right to reject the proposal if any information is false.
Note: Different insurers might have different requirements when it comes to documents, so you can check the insurer's requirements and get your documents ready.
Joint term insurance for husband and wife is beneficial if you are on a tight budget or if your spouse is a homemaker. You get many benefits if you buy a joint term plan, so if you buy the plan for yourself, you can avail of these benefits. Before you buy a policy, you must read the terms and conditions carefully to avoid ambiguity when you are filing a claim. Moreover, you can also use the term insurance calculator to check the amount of premium you need to pay for the policy and choose a policy that suits your requirements and fits your budget.