Life insurance plans especially term insurance plans were initially designed to attract and focus on the requirements of the protagonist of the family, the one who was responsible for taking care of the whole family. This protagonist like our Indian films was the male member, the hero of the family. Therefore, most of the term life insurance plans were devoted to their needs. It was also because it was unusual or rather uncommon for females to have a professional career after getting married. But as things have shifted and now most families, especially in metropolitan cities, have both husband and wife working and earning together. With this change, term life insurance plans have also changed their design and the focus is now to provide a plan such as to fulfil the needs and demands of the customers ( both male and female ). Not only male members but even female working members of the family purchase term life plans so that they can guard their family against unavoidable risks. In order to simplify things, insurance companies have launched term insurance plans which both husband and wife can buy together instead of buying separate plans. Acquiring a term life insurance plan requires a lot of research which includes paperwork, documents and maintaining a budget according to the premium of the policy. And to do this separately is even more tricky and complicated because then you have to manage two separate policies with two premium instalments.
Before buying a term plan for couples there are several elements which are necessary to consider and study. Although the term plans for couples have the same features and coverage as it is for a regular term insurance plan. The only difference is that the couples term plan insures both husband and wife, unlike the singles term plan which only covers the insured.
Singles Term Insurance Plan Vs. Couples Term Insurance Plan
Although the basic features of both singles term insurance plan and couples term insurance are almost similar. Still, there are some features of the couples term insurance plan which differentiates it and makes it unique when compared to singles term insurance plan.
Let's take a look at some of those differentiating features:
- In terms of price value - The term insurance plan for couples is comparatively cheaper than a regular term insurance plan for an individual. The term plan for couples is more affordable and reasonable.
- Death Benefit - The primary role of any life insurance policy is to offer a life coverage to the insured and ultimately provide a death benefit to the beneficiary of the policy upon the unfortunate demise of the insured person. Both single and joint term insurance plan offers this death benefit to the nominee of the policy, however, in a separate term plan for a couple the beneficiary receives two separate amounts while in a joint policy there is only one payment.
- Less paperwork - As mentioned before, having two separate term insurance policy increases and doubles the paperwork involved in managing a term plan. Therefore, naturally, if you have a single policy which involves both you and your spouse then the paperwork and documentation are lesser than what it is if you buy two separate plans.
- In case of divorce - Well buying a couples term insurance plan means both the partners involved in the policy are responsible for the premium amount and they both are protected under the policy equally. It is almost like both the members of the policy are one single unit for the insurance plan. However, if due to any reason the couple decides to get a divorce, the policy is then termed invalid. It is crucial for the policy to continue, only if both the members timely pay their premium amount. In a single term plan, there is no such issue of the couple being separated or divorced.
Benefits of Spouse Term Insurance Plans
Budget-Friendly - Term insurance plans are the most popular form of life insurance plans, however, they require a premium payment to keep the policy alive. This premium is dependent on the sum assured of the policy. Spouse term insurance plans are affordable and budget-friendly because the premiums are divided between both the members of the policy and are comparatively lower than the premiums of two separate term insurance plan.
Multiple Payout - Death benefit which is paid to the nominee of the policy is one-time payout only if it is a regular term insurance plan. But in a term insurance plan for couples, there are multiple payment options. If any one member of the policy dies, then the other has the option to either receive the death benefit or he/she can choose not to get any payment and can continue the policy so that the beneficiary receives the amount altogether. Also, if the couple dies together, then the beneficiary receives the death benefit all at once.
Tax Benefits - A life insurance policy allows you to avail several tax benefits and so a spouse term plan is no exception. Under the Income Tax Act,1961, all payments made under life insurance plans such as premium are excluded from the income tax. Also, the death benefit amount which is offered is not subjected to taxation.
Important Elements of a Spouse Term Insurance Plan
For working couple - It is considered most important for working couples to have a spouse term insurance plan because the family budget is dependent on the earnings of both the partners. Loss of either one partner will result in a sudden financial crisis for the whole family, especially if there are children. Having a spouse term insurance plan fills the monetary gap which is left due to the loss of either one of the partner. It offers both financial and mental support to the family and the spouse to figure out a way to deal with the liabilities.
For working & non-working couples - However the trends of modern society has changed the whole working scenario, still, in many families either one of the partner prefers to be stay at home parent. But it is a false judgement to conclude that if a person is not working then he/she doesn't require life insurance. It is true that a non-working partner doesn't contribute financially but he/she has a lot of other responsibilities which cannot be left unaccounted. Having a spouse term insurance plan for working & non-working couples ensure assistance with the other things that the non-working partner was taking care of such as cooking, cleaning, financing etc which might seem like an easy task but in reality, they are not.
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