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Term Insurance Plan for Married Couples

Term insurance is a form of life insurance which a person pays for a certain period. It doesn't come with the commitment burden of paying for a lifetime. Once the period is decided while applying for the plan, it will retain for the rest of the time unless the insurer wishes to extend the plan's period or cover. It is possible to convert term insurance into a life insurance plan by extending the plan's period. This will result in an increased premium amount, which will come into effect from the very next month. Hence, it is essential to decide the period of the plan when applying.

Compared to traditional life insurances, the premium amount costs less, and the benefits are more. If the insurer passes away due to unfortunate events during the policy term, the policyholder's family will receive the death cover. There are no other benefits besides the death cover provided by the term insurance. The benefits offered by a death cover can be increased by using riders and add-ons like a critical illness rider or an income benefit rider.

What Happens If the Policyholder Passes Away after the Term Insurance Lapses?

If in case the policyholder passes away after the term insurance has lapsed, the insurance provider is in no way responsible for paying the death cover as the insurance is filed only for a certain period which was specified by both the parties (insurer and insurance provider) at the time of taking up the insurance. The policyholder's family cannot claim for the death benefits provided by the term insurance if the policyholder dies after the term insurance has expired. Thus, to prevent this, one can extend the plan's period when it is about to end. This can be easily done by requesting an extension of period to your insurance provider either through online methods or by offline means. It is to be noted that the new premium that is to be paid after extending the term will cost more due to the age of the insurer.

What are the Term Insurance Policies for Married Couples?

In a joint term insurance plan or term insurance for married couples plan, the premium amount is paid on behalf of the two policyholders as one, and this amount is paid on the first claim basis. When one of the two policyholders passes away, the sum is provided to the other policyholder. If both of them pass away, the amount, i.e., death cover, is provided to the family members, usually their children. The joint term insurance or term insurance for spouse plan comes with tax benefits and, if paid along with critical illness cover, can offer the policyholders with tax benefits like that of Section 80C and Section 10(D) of Income Tax Act, 1961 as per the conditions stated. This will be provided to the policyholder's family along with the death cover in case of the death of one or both policyholders.

It is to be noted that some of the term insurance for married couples' policies have restrictions over the claimable amount. The amount received by the spouse or the family members will provide financial security in the absence of one of the policyholders, and the liabilities will be taken care of.

Why should you buy the Term Insurance for Married Couples?

The key reasons why you must buy the term insurance for married couples are as follows:

  • The term insurance for spouse plan will also provide the family with an amount that will support future expenses like a child’s marriage and other emergency expenses
  • It provides tax benefits. The premium amount paid and the death cover amount comes under tax exemptions according to Section 80C and Section 10(D) of Income Tax Act, 1961
  • The term insurance for married couples' policies' benefits can be further expanded by including add-on plans like critical illness covers and other such covers
  • The plan will help the couples create a financially secure future for their children and their family
  • Since the premiums cost less when compared to traditional life insurance, it will help the newly married couple healthily tackle the expenses while also providing enough attention to their future together

Types of Term Insurance for Married Couples

There are four basic term insurances. Each varies on the grounds of the term period and the death coverage. They are:

  • Convertible Term

    The term insurance can be converted into permanent life insurance, and this does not require a medical certification or medical tests as the policyholder has term insurance coverage. This can be done by extending the term of the term insurance.

  • Increasing Term

    This type of term insurance allows the policyholders to expand the benefits of death during the policy. The premium amount will increase due to this, but it can be balanced by paying less in the earlier stages of the policyholder's life. This will prove to be an efficient way to improve the benefits offered by term insurance.

  • Decreasing Term

    Decreasing term is also known as the mortgage term. As the name suggests, it is the opposite of increasing terms. It will cause a deflation in the death benefits as it covers the mortgages that are left unpaid by the policyholder.

  • Annual Renewable

    In this policy, the policy amount increases every year as the term insurance is renewed every year, and the policyholder's ages increase simultaneously.

Documentations Required for Registering in Term Insurance for Married Couples Policy

To buy term insurance for married couples' policy, the policyholders must submit necessary documents like the salary slips for the last three months, form 16 (latest updated version), income tax returns, bank statements for the last six months and, employer certificate under income documents.

Bank statement, Aadhar card, passport, driver’s license, voter’s ID, ration card, passbook with entries for the last six months are accepted for address proof documents.

For ID proof purposes, the couples can submit their Aadhar card documentation or PAN card or their voter’s ID.

To submit the documents related to age proof, the couples can submit their marriage certificate or birth certificate or Aadhar card or passport, etc.

Eligibility Criteria

There aren’t any specific criteria concerned with buying term insurance for spouses. The minimum age at which one can apply for term insurance is 18 years, and the maximum is 65 years. It is to be noted that the premium amount increases with age, and it is essential to choose a plan that will support your earnings and savings.

Maturity of the Term Insurance for Spouse

As per the rules and regulations, the policy will extend up to 65 years to 70 years of age. The policy's period can be extended by extending the term. The premium paid to extend the term will be high compared to the original premium amount. And this premium amount will usually increase as the policyholders' age.

  • Riders and add-ons

    To extend the benefits reaped through the term insurance for spouse policy, policyholders should take on riders and add-ons. These are additional plans that will improve the overall benefits that the family of the policyholders can procure. There are several important and useful riders and add-ons. Some of them are-

  • Waiver of premium

    If the policyholders are unable to pay the premiums due to lack of income or permanent disability, the premiums for the coming months will be waived off. Another benefit of this is that the policy will be made to remain active.

  • Critical illness rider

    The term insurance for spouse comes with tax benefits and, if paid along with critical illness cover, can offer the policyholders with tax benefits like that of Section 80C and Section 10(D) of Income Tax Act, 1961 as per the conditions stated.

  • Income benefit rider

    In this rider, the policyholder or the family will receive an assured amount along with the death cover for 5-10 years after the demise of the policyholder(s).

  • Accidental death benefit rider

    If the policyholder(s) passes away due to an accident, the spouse or the family members will receive an additional amount along with death cover, which will support them to tackle expenses.

  • Accidental Total and permanent disability rider

    In some term insurances, the policy provider will pay the remaining premium amounts in case of permanent disability of the policyholder.

Claim Settlement Ratio and Solvency Ratio

While looking for the perfect term insurance for spouse policies, it is essential to look at certain specifics like the claim settlement ratio and the solvency ratio.

  • Claim Settlement Ratio

    The claim settlement ratio is defined as the ratio of the number of claims settled by the number of claims received and multiplied by 100.
    It shows the percentage of reliability of the company offering the policy. A good company should have a high claim settlement ratio for a given financial year.

  • Solvency Ratio

    This ratio determines the insurance provider's ability to settle the claims raised by the policyholders. IRDA suggests the people take up policies from an insurance provider who has a solvency ratio of a minimum of 1.5.

Advantages of buying the Term Insurance for Spouse Policy

Term Insurance for Married Couples comes packed with a certain set of advantages. They are as follows:

  • Support your Family

    In case the policyholder passes away during the policy period, the death benefit provided to the other policyholder or to the family, which will help them in tackling monthly expenses such as child's education expenses, medical expenses, grocery expenses, etc. It will also provide them with an amount that will support future expenses like a child's marriage and other emergency expenses.

  • Covers the Policyholders' Assets

    If the policyholders have taken a loan for investing in assets like a real estate property or a vehicle or residential buildings, the loan amount cannot be completely paid off in case of a demise of the policyholder(s). In such a case, the death cover provided to the other policyholders or the family can help them pay off the loan amounts.

  • Tax Benefits

    The term insurance for spouse plan comes with tax benefits and, if paid along with critical illness cover, can offer the policyholders with tax benefits like that of Section 80C and Section 10(D) of Income Tax Act, 1961 as per the conditions stated. This will be provided to the other policyholder or the family along with the death cover in case of the death of the policyholder(s).

  • Disability Support

    In some term insurances, the policy provider will pay the remaining premium amounts in case of permanent disability of the policyholder(s).

  • Add-ons

    The term insurance policies’ benefits can be further expanded by including add-on plans like critical illness covers and other such covers.

How to buy the Policy?

One can purchase the term insurance for married couples plan either through online or offline modes.

  • Online Method

    The online method of buying term insurance for married couple involves the following steps:

    • Step 1: Visit the website of the insurance provider you have chosen to buy the plan
    • Step 2: Click on the “online insurance” option
    • Step 3: Within that option, you will find the “term insurance” option, click on ‘term insurance’ tab
    • Step 4: After landing on the term insurance page, enter the value for "sum assured"
    • Step 5: Next, enter the value for "policy term." Be careful will entering such values as they have a direct effect on your policy
    • Step 6: The next step is to choose the term in which you will pay the premium. The premium amount you have to pay will appear on the screen based on the values you have previously entered
    • Step 7: If you choose to pay right away, you will be redirected to your bank's payment gateway. Enter your card details and make the payment
    • Step 8: Once the transaction has been made, you will receive an acknowledgement message
    • Step 9: You will receive a letter or a mail from your selected insurance provider as to whether your policy has been sanctioned
    • Step 10: That marks the last step with you successfully buying term insurance for spouse policy online
  • Offline Method

    One can contact brokers or agents who are certified professionals to avail of the term insurance for married couples offline. They will assist you in applying for the plan by procuring the required documents and details.

What are the Few Pointers to Take Into Consideration while buying a Term Insurance Plan?

While buying term insurance can seem like a commitment, there are a few things to consider before you buy the plan. Some of them are:

  • Age

    The premium one pays for the plan will increase as the age of the policyholder increases. There are options to pay the bulk of the premium during the early stage of life. At the same time, the policyholder earns and pays the minimum during the later retirement phase of the policyholder.

  • Period/Term

    The period in which one pays the premium will be determined when the policyholder signs documents when they buy the insurance plan. This term will affect the premium amount. This will also affect the death cover. Hence, it is important to choose the period for insurance. While the term insurance plan can be extended to permanent life insurance, the premium amount will increase due to the extension.

FAQs

  • Q: What is term insurance known for?

    Ans: The term insurance policy is a simple form of life insurance capable of providing death cover to the policyholder's family in case of the policyholder's sudden demise during the policy term. It is cheaper when compared to traditional life insurance and has more benefits.
  • Q: Who can take term insurance?

    Ans: The answer is anyone. There is term insurance for married couples, taxpayers, professionals, elderly parents, or anyone above the age of 18.
  • Q: Can married couples take up term insurance together?

    Ans: Yes, they can. In a joint term insurance plan or term insurance for married couples plan, the premium amount is paid on behalf of the two policyholders as one, and this amount is paid on the first claim basis. When one of the two policyholders passes away, the sum is provided to the other policyholder. If both of them pass away, the amount, i.e., death cover, is provided to the family members, usually their children.
  • Q: Does term insurance for spouse policies provide tax exemptions and benefits?

    Ans: Yes, they do. The policy does provide tax benefits to the policyholders. The term insurance comes with tax benefits and, if paid along with critical illness cover, can offer the policyholders with tax benefits like that of Section 80C and Section 10(D) of Income Tax Act, 1961 as per the conditions stated. This will be provided to the other policyholder or the family along with the death cover in case of the death of the policyholder(s).
  • Q: What are the age criteria for people registering in a term insurance plan?

    Ans: There are no unique criteria when it comes to registering in a term insurance plan. The policyholder must be of a minimum age of 18 years and a maximum of 65 years. Couples who age anywhere between 18 years and 65 years can buy the term insurance for couples' plans.
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