When you get married, you are legally, financially and emotionally liable to another person. Such responsibilities urge you to consider multiple life choices that include the financial liabilities your family is left with in case something unfortunate happens to you. Taking a cue from this, availing of appropriate life insurance plans that safeguard the interest of your family is a solid financial move. An affordable option in this direction is Spouse Term Insurance policies.
However, term insurance plans are crafted to act as an income replacement for the policyholder and, hence, often involve a sizeable cover amount stretched over a long-term financial commitment. Thus, before you opt for such a plan, you should consider the appropriate premises, benefits, drawbacks, and best policies across Spouse Term Insurance Plans.
Read on to know more!
Best Spouse Term Insurance Plans
| Best Housewife Term Insurance Plans | Best Joint Term Insurance Plans |
|---|---|
| Max Life Smart Total Elite Protection Plan | HDFC Life Click2Protect Super |
| HDFC Life Click2Protect Super | |
| ICICI Prudential iProtect Smart | |
| TATA Sampoorna Raksha Promise | |
| Bajaj eTouch II |
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What are Spouse Term Insurance Plans?
Spouse Term Insurance policies offer coverage to housewives (without a strict source of income) or spouses of primary policyholders (irrespective of whether the spouse is salaried or not). Based on this, there are two types of Spouse Term Insurance plans-
- Term insurance plans for housewives: In the case of term insurance plans, insurers are specifically stringent about the required eligibility criteria. One factor in deciding a potential policyholder's eligibility is his/her income slab, which reflects his/her premium payment capability and quality of life. In turn, this translates to the payout risk involved across term insurance policies for insured individuals. However, there is an exception to the rule - insurers are willing to extend coverage to housewives (without a fixed source of income) by factoring in the income potential of the husband. The offered sum assured is capped at a fixed amount or as a % of the husband’s income or his existing base sum assured.
- Joint term insurance policies: Under this variant of the Spouse Term Insurance plan, both the husband and the wife are covered under a single term insurance policy, wherein the underwriting happens only for the husband’s profile. However, there are certain restrictions applicable in this case - namely, term insurance riders. Based on the insurer and the term insurance plan chosen, you can either have access to limited riders or no access at all. Moreover, in this case, the flexibility of the sum assured varies significantly.
What are the advantages of Spouse Term Insurance Plans?
- Convenient management of a single policy for both spouses (in the case of joint term insurance plans): When you are thinking of term insurance policy renewals, having a single plan for both spouses indicates convenient plan management.
- Term insurance coverage despite no source of constant income: As commonly known, term insurance plans almost always require the policyholder to have a steady source of income. However, in the case of Spouse Term Insurance policies, even housewives with no steady source of income are covered up to a capped amount. The underwriting team uses the husband’s income profile to determine the housewife's coverage eligibility.
- Affordability of premiums for a single policy: While it’s true that term insurance plans are one of the most affordable financial protection products in the industry, having a single plan to cover both the wife and the husband cuts down the premiums significantly (as compared to two different plans for each).
What are the disadvantages of Spouse Term Insurance Plans?
Spouse Term Insurance Plans are similar to having a joint savings account at a reputable bank, where the goal is to secure your partner’s financial future if something happens to you. However, you need to consider the tax benefits and premiums when it comes to term insurance.
- Term insurance usually lets you save on taxes under Section 80C and Section 10(10D). So, having two separate policies means you get two sets of tax savings on your premiums.
- Some insurers also offer lower premiums for female policyholders, which can be a helpful perk. But you’ll need to decide if managing two separate policies, renewing them, and choosing the right riders is worth the hassle.
- Spouse Term Insurance Plans can limit your coverage amount and come with more restrictions on eligibility. It’s a good idea to check your eligibility for a joint policy before making a decision.
How to Choose the Best Spouse Term Insurance Plans in India?
- Choose a credible term insurance provider.
When selecting a term insurance plan, one of the key factors to consider is the insurer's credibility. Since a term insurance policy is designed to serve as a financial replacement, the coverage amount is typically in crores. Therefore, it’s crucial to choose an insurer you can trust, one that offers a smooth claims process and strong prospects for long-term reliability. To ensure this, select a life insurer with:
- A Claim Settlement Ratio of 97% or higher
- An Amount Settlement Ratio of 90% or higher
- The lowest possible complaint volume
- Choose an appropriate Spouse Term Insurance policy
a. Asses the required coverage: Since the Spouse Term Insurance policy will most likely cover two individuals, you will need to decode and analyse the appropriate term insurance cover amount. On the other hand, if the policy in discussion only covers a housewife, take a look into the Human Life Value of the individual and her contribution to the family’s overall growth.
b. Choose the optimum set of term insurance riders: Unless you have opted for a Joint Term Insurance Plan, you can opt for an optimum term insurance rider (like Waiver of Premium, Accidental Total and Permanent Disability, Critical Illness Rider, and more). This can help you customise your policy to fit your tailored financial requirements.
c. Compare premiums: Term insurance premium calculations take into account the following factors -
Yet, the premiums for one policyholder can differ from one term insurance provider to another and from one term insurance policy to another.
Thus, it is best to compare term insurance plans using a free tool and then seek professional help to tally the premiums. Based on this thorough understanding, you can choose the perfect Spouse Term Insurance policy that is feature-rich yet affordable.
What are the Top Spouse Term Insurance Plans in India?
| Best Term Insurance Plans in India | Features | Drawbacks |
|---|---|---|
| Max Life Smart Total Elite Protection (Housewife only) | Accidental Death Benefit Zero Cost Option / Smart Exit Option Terminal Illness |
No top-up option No option to boost your cover as per the inflation rate |
| HDFC Life Click2Protect Super (for both housewife term insurance plans and joint term insurance policies) |
Critical Illness Benefit Total Permanent Disability Benefit Zero Cost Option Inflation Protection Accidental Death Benefit Terminal Illness |
Pricier than the other plans in its category |
| Bajaj Life eTouch II (Housewife only) | Return of Premium Terminal illness Accidental Death Benefit Rider Inbuilt Waiver of Premium Smart Exit Benefit |
No CI (Critical Illness) rider available |
| ICICI Prudential iProtect Smart (Housewife only) | Inbuilt Waiver of Premium Smart Exit Benefit Accelerated Critical Illness Benefit Terminal Illness Life stage Benefit |
Needs an enhancement of their operational proficiency |
| Tata AIA Sampoorna Raksha Promise(Housewife only) | Waiver of Premium Accidental Death Benefit Critical Illness Rider Accidental Total and PermanentDisability Rider Hospi Care Benefit Terminal Illness |
Poor overall operational efficiency |
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