Life Insurance for Your Spouse

What is Life Insurance for Spouse?

To better understand why life insurance for your spouse can make a worthwhile gift, it is necessary to first understand what a life cover is. Life insurance is a contract between the policy holder and the policy provider, that is, the insurer.

It starts with an individual choosing the suitable policy for themselves or for someone else, like buying life insurance for their wife or husband. There are various types of life insurance plans, each one offering some unique features. For example, ULIPs as life insurance for your spouse may allow your significant other to create a market linked corpus for the future and achieve their long-term goals, while also having a life cover. On the other hand, if you do not expect any sort of maturity returns from the plan but want to ensure a cost-effective life cover, you may opt for term life insurance.

Once you choose the life insurance for your husband or wife, you may then select whether you want to buy it online or offline. Many plans are now available through both modes. However, some may be exclusively online.

Once you buy the plan, you are required to pay premiums regularly, as per the chosen premium payment frequencies. If you are buying life insurance for your spouse, they will be the ones insured under the policy. If they were to face something unfortunate, i.e., a circumstance covered by the plan, their policy nominee can make a claim and receive a benefit, as per the terms and conditions stated in the policy. You can also choose life insurance riders to enhance the scope of the policy.

 

Why Consider Life Insurance for Your Spouse?

Here are some reasons to buy a life insurance policy for your spouse:

1. Along with emotional loss, you might suffer a financial loss due to the untimely demise of your spouse. In such a case, a life insurance policy can be helpful.

2. If you choose savings-oriented life insurance plans, you can supplement your savings and create a corpus for joint financial goals like buying a home or children’s higher education.

3. If you pay premiums for your spouse’s life insurance policy, you can claim an additional deduction under Section 80C (only under the old tax regime).

 

Who Should Buy Life Insurance for a Spouse?

The following types of individuals can consider buying a life insurance policy for their spouses:

 

1. Married couples without children

Married couples who don’t have children might have other financial goals to fulfill, such as buying a home or saving for retirement. Moreover, they may need financial security if their partner passes away suddenly. Hence, such couples can purchase a life insurance policy for their spouses.

 

2. Married couples with children

Couples who have children may want to save for their child’s higher education. Additionally, they may have other goals. They can also consider life insurance plans for financial security and goal planning.

 

3. Newly married couples

For newly married couples, financial responsibilities often increase after marriage. They can consider buying life insurance plans for financial security and for helping fulfil financial obligations.

 

4. Dual-income couples

If both spouses are earning, a sudden demise of either spouse can cause a financial loss for the other. In such cases, life insurance plans can prove helpful, as they provide the much-needed financial assistance in the absence of a spouse.

 

Benefits of Buying Life Insurance for your Spouse

Once you understand how life insurance works, you may be better equipped to choose the appropriate type of insurance policy and the preferred riders that would make a suitable life cover for your significant other. Life insurance for couples can be different from buying life insurance for yourself, as you are buying the cover for another individual.

Here are a few benefits of buying life insurance for your husband or wife that may help you understand why it is an apt gift for your partner.

 

1. Financial Protection for Dependents

A person’s contribution within the family cannot always be measured in terms of their financial contribution or their income. Whether your spouse is earning or not, there may be other ways they are significant to the family. If they were to face anything unfortunate tomorrow, their absence may create a void in all the lives they touched with their love. While it may be almost impossible to replace them, a bit of financial support can help their dependents carry on without them. Life insurance for your spouse offers this possibility of financial protection.

 

2. Financial Support during Difficult Times

When buying life insurance for your wife or husband, remember that you can also choose riders with your policy by paying a nominal additional premium. These are add-on features that can add to the benefits offered by the insurer along with the plan. Some of the available riders are:

• Waiver of Premium
• Accidental Death Benefit
• Accidental Total/Partial disability
• Income Benefit
• Critical Illness

Some of these riders, such as accidental permanent disability and critical illness, may help you stay prepared to face an unfortunate circumstance where your significant other may have to face hospitalisation or extensive medical care.

Riders can make the plan such that it, in turn, makes you better equipped to face dire situations. Though you may have to pay an additional premium to opt for riders, it is preferable to add them to the plan to make the coverage comprehensive.

 

3. Joint Life Insurance can cover you both

When getting life insurance for your spouse, you can also opt for a joint life plan. This is life insurance for couples where both individuals are covered. This allows you to support each other while simultaneously taking care of your loved ones, such as your kids, parents, or siblings. You pay one premium to cover two lives under the same plan. It could be an option for those who seek life cover for themselves as well as their partner under a single plan.

 

Things to Consider Before Buying Life Insurance for Your Spouse

 

1. Coverage requirements

Assess your coverage needs to find suitable life insurance plans. For instance, if you only want financial protection, you can choose term insurance plans.

Also, determine the optimal sum assured to cover the financial responsibilities for which you are purchasing life insurance.

 

2. Key policy features

Once you have shortlisted the type of policy you want to buy, assess its features and benefits. This will provide you with a clear understanding of what to expect from the plan.

 

3. Available rider options

Riders are additional coverage options to enhance the scope of your policy at an additional nominal premium. Review the available riders and select those that best align with your coverage needs.

 

4. Terms and conditions of the policy

Review the policy's terms and conditions, including the premium payment terms, premium amount, coverage exclusions, and other key details.

 

5. Long-term financial goals

You can choose savings-oriented life insurance plans that offer insurance coverage while helping you create a corpus for long-term financial goals.

 

Key Takeaways

• Buying a life insurance policy for your spouse can be a meaningful gift, as it provides them with financial security.
• You can choose from different types of life insurance plans for your spouse.
• Joint life plans are also available, which cover both spouses under a single policy.
• Newlyweds, couples with or without kids, and dual-income families can consider buying life insurance for their spouses.
• If you pay premiums for your spouse’s life insurance plan, you can claim tax benefits under Section 80C (only under the old tax regime).
• When buying life insurance for your spouse, assess your coverage needs to choose suitable plans.
• Read the policy's terms and conditions, understand the benefits, and review the available riders before buying the plan.

 

Conclusion

Buying a life insurance policy for your significant other can be a way to show how much you care for their well-being and want to support them and their endeavours, while they strive to keep their loved ones safe and happy.

 

FAQs

 

1. How much coverage should I buy for my spouse?

The coverage depends on various factors, such as your financial goals, existing assets and liabilities, and the number of dependents. Besides this, you can use a life insurance calculator to find the right coverage based on your needs.

 

2. What happens if the spouse passes away first in a joint policy?

If one spouse passes away, the joint life policy will pay the death benefit. Under some plans, the policy is terminated upon payment of the death benefit. However, under other plans, the coverage might continue. You can check the coverage terms of the policy you choose to buy.

 

3. Does buying life insurance for my spouse have any tax benefits?

The premiums that you pay for your spouse’s life insurance policy are eligible for a deduction under Section 80C under the old tax regime.

 

4. Are riders available when buying life insurance for a spouse?

The availability of riders depends on the plan that you choose. You can check the available riders and select suitable one at an additional nominal premiums.