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.
Key Takeaways
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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.
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.
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.
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 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.
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A spouse term insurance plan provides financial protection for your partner in the event of an unfortunate loss. It’s a life insurance policy where you, as the policyholder, can cover the life of your spouse for a specific term, offering peace of mind. Here's how it typically works:
Choosing the Coverage: You’ll select a coverage amount based on your financial goals and the needs of your spouse. This might include daily expenses, paying off debts, or future savings goals like children’s education.
Term Duration: The policy is set for a fixed term. The term length will depend on factors like your spouse’s age, health, and how long you want the coverage to last.
Premium Payments: You or your spouse will pay monthly or annual premiums for the term of the policy. The premium depends on factors such as the coverage level, your spouse’s health, and your age.
Benefit Payout: If the insured spouse passes away within the term of the policy, the beneficiary will receive the agreed-upon sum to cover financial responsibilities and living expenses.
End of the Term: If the term insurance for both husband and wife expires and no claim is made, the coverage ends with no payout, but you may have the option to renew or convert the policy into a permanent plan.
While buying a spouse term policy, the primary policyholder (i.e., you) needs 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. Here are the key features of a spouse term insurance plan:
Buying a term plan with spouse cover is ideal for nuclear families, wherein both spouses are working and have financial debts to pay. With term insurance for husband and wife, the policyholders can protect their family against the 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 a spouse or secondary life assured. The employment status of the secondary life assured or the spouse does not matter when buying the spouse's term insurance plan.
When it comes to spouse term insurance plans, there are plenty of misconceptions that can confuse people. Let’s clear up some of the most common myths:
It's Only for the Breadwinner: A common myth is that only the primary earner needs life insurance. However, a spouse who may not be working or earning a full income still provides essential support to the family, whether through childcare, household management, or emotional support. A spouse term insurance plan can provide much-needed financial stability in case something happens to one of them.
Term Life Insurance is Expensive: Many believe that term insurance is too expensive for their budget, but it’s often far more affordable than people expect, especially when compared to permanent life insurance. Since term plans only cover a set period, the premiums tend to be much lower while still offering significant coverage.
The Payout Isn't Worth It: Some people think the payout won’t be substantial enough to make a difference. In reality, you can customise the coverage to meet your family’s specific needs. From covering mortgage payments to providing for children's education, the payout can be a significant financial cushion during a difficult time.
The Policy Only Covers Death: While term insurance is generally for life coverage, many policies also offer additional riders or benefits, such as critical illness coverage or an accidental death benefit. So, it’s important to review your policy options to ensure you're getting the full range of protection.
I’m Too Young or Healthy for Life Insurance: It’s easy to assume that life insurance is only for older individuals or those with health issues. But the benefits of spouse term insurance plans when you're younger and healthier are higher. You can lock in lower premiums and ensure your family’s financial security from the start.
By debunking these myths, you can better understand the value of a spouse term insurance plan and how it can be a smart investment in your family’s future, no matter your life stage or circumstances.
The iSelect Smart360 Term Plan by Canara HSBC Life Insurance provides term insurance protection for spouses. Under this plan, you can opt for a life cover extending over a lifetime and also enhance the coverage through additional in-built benefits such as an Accidental Death Benefit, an Accidental Total & Permanent Disability Benefit, and a Child Support Benefit.
At the same time, you can add your spouse (both working and non-working) to the policy while availing yourself of a discount on the premium rates for the spouse. As a 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.
In insurance, a "spouse" typically refers to the policyholder's legally married partner. Depending on the insurance company's policies and the jurisdiction's legal definitions, the term can also include common-law partners or domestic partners.
There is a spouse term life insurance option available to both spouses; one spouse may be the family's earner, and the other may be a non-earning member.
For couples, the iSelect Smart360 Term Plan by Canara HSBC Life Insurance offers comprehensive term insurance protection, including lifelong coverage and additional benefits like Accidental Death, Total & Permanent Disability, and Child Support.
Yes, a joint-term life insurance plan is a cost-effective alternative that provides insurance coverage for two people by paying a single payment.
Yes, it is generally acceptable to have multiple-term life insurance policies. Two-term life insurance policies can provide additional financial protection and flexibility, allowing you to tailor your coverage to your specific needs, such as covering different financial obligations or different family members.
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
Canara HSBC Life Insurance offers online term insurance plans to secure your family financially in your absence.
