Benefits of Spouse Term Insurance Plans in India [2024]

2024-08-02

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How will a Term Life Insurance Plan Benefit

As the name suggests, a spouse term insurance plan allows you to include your partner/spouse under your term plan coverage. This way, the same life insurance policy will protect both you and your partner against life’s uncertainties. Moreover, a spouse term insurance plan is a tailor-made life protection instrument not only for working couples but also for those where one spouse is a homemaker.

The financial protection of a spouse term insurance plan is primarily useful to cover non-working partners, who cannot opt for a term plan easily on their own. That said, having spouse term insurance cover makes it easier to track premium payments, policy benefits and claim settlements under a single policy, instead of two separate plans. Here, we look at various features and benefits of spouse term plans to help you make an informed decision.

What is a Spouse Term Insurance Policy?

As it plainly suggests, a spouse term insurance plan provides the protection of life insurance coverage to both partners (husband and wife) under a single policy. A spouse term insurance plan offers various features and benefits including tax saving benefits, discounts on spousal premium payments, long-term policy tenure and regular monthly income payout to the surviving spouse.

Under a spouse term insurance plan, you can also opt for additional protection through critical illnesses, permanent disability, accidental death and dismemberment riders.

Key Features of Spouse Term Insurance Plans

While buying a spouse term policy, the primary policyholder (i.e. you) need to be an earning member of the family. Mostly, the maximum sum assured applicable under a spouse term insurance is either a specific percentage or a fixed amount of the primary policyholder’s applicable sum assured.

Benefits of Spouse Term Insurance Plans

In most cases, a spouse term insurance plans costs comparatively lesser than purchasing two separate term insurance policies (also, it may not be possible to purchase a separate term life cover for a non-working spouse). Another advantage of a spouse term insurance plan is the availability of the waiver of premium feature. If your spouse term insurance offers death benefit payout on the demise of the working partner, the non-working spouse will receive lump sum payment of death benefit, while the waiver of premium feature will waive off any remaining premium payments and help continue the life coverage for the surviving spouse. The premium payable under spouse term insurance plans is also eligible for tax deductions under Section 80C of the Income Tax Act 1961, while the amount received upon the demise of either partner is tax-exempt under Section 10 (10D) of the Act.

When Should You Buy a Spouse Term Insurance Plan?

Buying a spouse term insurance plan is ideal for nuclear families, wherein both spouses are working and have financial debts to pay. With a spouse term insurance plan, the policyholders can protect their family against death and disability of either earning member, while lightening the financial burden with the help of the insurance payout. Young parents having outstanding loans should also opt for a spouse term life insurance policy to make sure that their children remain protected against any future mishaps.

The sum assured payable under a spouse term insurance plan is calculated after assessing the age, annual income, health and lifestyle of the primary policyholder. For the spouse or the secondary policyholder, the insurance company may only ask for the verification of age and highest education. There may also be no need to conduct any medical test for life insurance, in case of spouse or secondary life assured. The employment status of the secondary life assured or the spouse does not matter while buying the spouse term insurance plan.

At Canara HSBC Life Insurance, we provide term insurance protection for spouses under our iSelect Smart360 Term Plan Term Insurance Plan (An Individual Non-Linked Non-Par Pure Risk Premium Life Insurance Term Plan, UIN: 136N072V01). Under iSelect Smart360 Term Plan, you can opt for a life cover extending over a lifetime and also enhance the coverage through additional in-built benefits such as Accidental Death Benefit, Accidental Total & Permanent Disability Benefit, and Child Support Benefit. At the same time, you can add your spouse (both working and non-working) to the policy, while availing of a discount on the premium rates for the Spouse. As primary policyholder, you can also increase your life cover based on your changing life stages and protection needs, so that you and your loved ones may enjoy a lifetime of financial safety and well-being – protected against life’s uncertainties.