What are the benefits of adding your spouse to your term insurance plan?
Sanjay and his wife Poonam were working with an IT multinational company based in Mumbai. Both were working, they were planning on taking term insurance policies, for tax-saving purposes. But, Poonam took a break from the job for a few years to take care of their newborn baby. During a conversation between both about planning for the future, Sanjay suggested the idea of adding her to his existing term insurance plan and converting it into a joint policy rather than buying two different policies. He said it would save them a lot of money and also will be easy to manage. Having decided on the same, Sanjay went on to purchase a joint term insurance policy with a sum assured of Rs.50 lakh, and Poonam being his spouse, was eligible for life cover of Rs.25 lakhs. As per the policy, if Sanjay encounters death during the policy term, Poonam shall get the death benefit of 50 lakhs from the insurance company while her coverage shall continue with all future premiums waived off.
The stability of a family is not dependent on one individual alone, but rather on both the partners. Therefore, if you’ve not put in place a plan to protect the future of your spouse, now is the best moment to make necessary arrangements. Insurance companies are offering the option of availing term insurance for couples which ensures that neither of them will be financially burdened should one of the two passes away during the tenure of the policy. The benefit amount will enable the other to be able to accept responsibility and take care of the family.
If both partners are employed and earning, the loss of one partner can affect the financial position of the entire family financially. In keeping with the current trends rather than obtaining the benefits of a separate policy for a spouse, a policy with term plan spouse cover can be availed that offers lifetime protection to the couple and their family.
Joint term plan benefits: It is essential to think about the requirements of your spouse in planning for the financial protection of your family even if you are not there. A term plan for both husband and wife not only provides a reliable assistance system with your partner to help you but can also have many benefits, that are explained below:
6 Reasons why you should add your spouse to your term insurance plan
- Dual benefit: With a single policy you can get coverage and lifelong protection alongside your spouse. While full coverage is given to the policyholder, fifty percent of the coverage is offered to the spouse, making the policy a comprehensive one to both. If the primary insured passes away during the period of coverage the amount assured on that person’s death is paid to the spouse who is insured by the same insurance policy. This allows the spouse to raise children and maintain the same lifestyle.
- Affordable premium: If you purchase the term insurance policy for your spouse separately, you need to shell premium for two different policies, but enrolling both under the same insurance, it helps you save the cost of the premium, to be paid for another similar policy. Moreover, in the joint term insurance plan, the coverage along with all the features of the policy are shared by the couple, eliminating any confusion. It is also easy and simple to track the date of the premium payment for a single insurance policy rather than managing multiple policies.
- Waiver of any future premiums: In a joint-term plan, if a policyholder under the plan encounters death during the policy term, the premium for spouse coverage is waived off completely as a goodwill gesture by the insurance company. For instance, if the policyholder is the husband, who dies during the duration of the policy, just because he opted for husband and wife life insurance the wife is also covered under the same policy and can benefit from this death benefit amount. Certain insurers completely waive off the premium for spouse coverage but ensure the same value of coverage is provided to the spouse until the expiration date of the term policy.
- Children’s future: By obtaining an insurance policy that covers both the partners, you indirectly secure your child’s future in a way that they won’t have to face any financial difficulty if there is a death of either parent. Even if both parents die during the term of the policy, children will be able to receive the death benefits of both parents, allowing them to take care of their financial requirements in the future.
- Lifestyle maintenance: In a family where the couple was employed, all members may have been dependent on them to provide all the financial requirements for the entire family. If any of the members among the couple dies, then it might get difficult to maintain the same lifestyle. But if you choose to purchase an insurance plan that includes spouse coverage, the death of any partner does not impact the financial situation of family members, helping them continue living the same way as before helping them maintain the same lifestyle.
- Income Tax Benefits: Like with any insurance plan, purchasing a jointly-owned term insurance policy in India does help you with many income tax benefits. The premiums towards the joint term insurance policy can be claimed for the deduction, according to Section 80 (C) and the death benefit can be claimed as tax benefits under Section 10 (10D) as per the Income-tax act.
With the many uncertainties surrounding our life, life insurance is an absolute necessity. During these situations, a family needs to purchase a term plan with spouse protection to streamline all the necessary responsibilities. While it helps them deal with any adverse circumstances, it also helps create a positive belief that their spouse is there for them and that their family’s future is secured in case something unfortunate happens to any of them.