With the concept of a traditional family fading away at a rapid pace, women are no longer restricted to being homemakers. With the narrowing gender gap and quality education available for all, Indian women are now regarded as breadwinners too.
Today, it is quite common for both spouses to be working full-time and providing for the family. Although a dual-income household has enough disposable income, their expenses (both household and luxuries) are usually equally high. Some of these expenses include monthly groceries and household items, utilities, childcare, everyday travel, etc.
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Since most of their income is spent on sundry expenses, dual-income families often don’t have adequate savings to rely on in case of unexpected emergencies or after their retirement.
If you find yourself in a similar boat, don’t worry too much! You can certainly turn things around. If both spouses invest in Life Insurance, for example, you can actually save up a pretty decent amount, which can act as a contingency fund at a later stage in life.
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So, how does a Life Insurance policy help dual-income families? To put it simply, if one or both of the spouses pass away unexpectedly, it provides financial security to the remaining spouse, as well as the children, so that they don’t have to bear the financial brunt of the loss of one earning member.
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Now let’s go into a little more detail. Here are 4 important reasons why dual-income families should invest in individual Life Insurance policies.
Death can strike without warning, which is exactly why you and your spouse must be prepared for such unfortunate situations. A simple solution is to invest in a term plan. Both you and your spouse should invest in individual Term Insurance plans. The advantages of doing this are:
- In case of the untimely death of you or your spouse, the rest of the family can find financial solace in the claim from the deceased member’s policy.
- In case of the untimely death of you AND your spouse, your children or other nominees can get financial support from the claim settlement from both policies.
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Unfortunately, even if you find yourself in the pink of health today, health issues could come up unannounced. What if you suffer a heart attack, stroke or cancer? Or what if you meet with an accident and become disabled for life because of the accident?
In such cases, the burden of providing for your family, taking care of your medical care expenses and even taking care of yourself will fall on your spouse. But, if you invest in an insurance policy with a critical illness rider, like a Cancer Care Insurance plan, or an accidental death/disability rider, you can ease the financial burden on your earning spouse.
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Imagine you have a Home Loan, a Car Loan or a huge Credit Card debt, which you are struggling to pay off. What happens if you unexpectedly die? How would your spouse pay off all these debts with just his or her income?
As you can imagine, it would place a massive financial strain on your family’s finances. If you had insurance in place, your spouse would be able to settle all or at least a major chunk of the debts with the claim settlement amount.
This is why we also insist that both you and your spouse should invest in individual insurance policies because if you don’t your debts could be a huge financial burden on your nominees or your children, in case both of you die unexpectedly.
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Holding individual insurance policies can help you and your spouse save on tax every year. Section 80C of the Income Tax Act exempts the premiums paid on any Life Insurance policy from tax. Although this looks like an attractive reason to get a Life Insurance policy, it shouldn’t be the only reason why you opt for one.
Additional Reading: The Beginner’s Guide To Saving Tax With Insurance
In this sense, dual-income families have an edge over single-income families, but that doesn’t mean that they don’t need to plan their finances. As a couple, investing in individual Life Insurance policies is the perfect way to create a corpus for financially tough times in life.
Do you think that working couples should invest in individual insurance policies? Let us know your thoughts in the comments section below.