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Life Insurance Planning for Working Couples

By Vikas Chandra Das
21 July 2022, 11:46 AM

Amongst all the monotonous planning involved in our lives, one of the most important planning is Financial Planning. Financial planning is very essential these days as the expenses today are high enough to cause a dent in the pocket of a common man. Moreover, with inflation rising very steeply, survival by sticking to a monthly budget is quite difficult.

However, in the case of working couples, the scenario is somewhat different as there is a dual flow of income to meet the household expenses. And so, the need for planning remains necessary in the case of working couples especially the need for insurance planning.

For example, Ravi and Keerti both are working and have an annual income of around INR 20 lakh. Ravi is 33 years and Keerti is 35 years of age. Like most of the working couples, they have a car loan, a home loan, and are also planning to be parents.  But, they feel that they are in a very tight financial situation as after considering all of their expenses they have a saving of INR 4 lakh in a year. So, now they have approached a financial planner for advising them with avenues for savings and wealth creation. 

As we know, insurance is one such avenue. But, have Ravi and Keerti opted for the right amount of coverage for the necessary purposes?

Why is Life Insurance Planning Necessary?

Most of the people in India very conveniently ignore the topic of insurance. Life is quite uncertain. And, with the pandemic, everyone has realised the fact that anything can happen to anyone at any point irrespective of age, gender, lifestyle, and so on. It is essential to make sure that your family stays financially secure in case of an eventuality. And thus, life insurance planning plays a crucial role to provide your family financial security and peace of mind to you. 

Often, it is noticed that even if life insurance is availed the coverage amount is insufficient. A large number of people state the major reason for not availing the life insurance policy as unaffordability. This is quite relevant for those families where there is a single earning member. For those families, most of the income must be used in meeting the day–to–day expenses. 

But, for those families where both the spouses are working, affordability cannot be a reason for not availing the benefits of insurance. Working couples can ensure that they have proper insurance coverage through proper life insurance planning. 

This simple article would clear the doubts regarding, why is life insurance planning is crucial and would help you in life insurance planning.

Why is Life Insurance Planning an Essential Part of Financial Planning?

Life insurance planning for working couples is important due to the below-mentioned causes: -

1. Income Replacement 

Generally, it is thought that those families which have a single earning member suffer the most on the death of the breadwinner. However, families with double earning members also suffer. With working couples, each one depends on the income of the other for meeting the expenses of the joint lifestyle. In such a case, the absence of anyone can put a strain on the other. Working couples must prefer having a Term insurance plan for both the spouses, so that in case of the untimely demise of any one spouse, the death benefit received under a term plan can help in meeting the expenses of the family.

2. Illness or any Disability

The dual income is only feasible when both the spouses are actively employed. However, if any one of them suffers illness or disability, then it would be a critical situation to handle.  With reference to our previous example, if Ravi or Keerti are suffering from some long-term illness or are suffering from some disabilities then there would be no more gainful employment. Moreover, their current expenses would also increase due to illness or disability and its necessary treatment. In such a case, there is an inevitable need to have health insurance with proper coverage, personal accident cover, and critical illness cover to overcome this emergency.

3. Unemployment

In today’s corporate world, job security is quite difficult. In the case of both the working spouses, if any one of them loses a job, then it would be difficult for the couple to meet the recurrent expenses. By having insurance with adequate cover, a corpus built over the years would come handy to take care of the expenses in such a situation.

4. Planning for the Future of Children

If a couple is going to start family planning, then they must focus on their financial planning first. When both the spouses are educated and working they would want a bright educational career for their kid as well. For this, they would need at least a corpus of about INR 10 lakh-15 lakh. In such a scenario, the purchase of a child plan is the best option available. The child plan can be a traditional or a ULIP but should have a long-term tenure. This would take care of the educational needs of the couple's children even if the parents are no longer with them. 

  • The maturity benefit provided by the Child plan would ensure that the educational needs of the child are met
  • In case of the death of the policyholder during the plan, the plan would continue and there would be a waiver of the future premiums too
  • The parents may be alive or dead, the maturity benefits would be paid for the educational needs of the child

So, with a child plan, a working couple can strategically plan for their child’s education.

5. Creation of Assets and Debts Payoff

In the case of working couples, a large part of their income is used in paying off their debts and liabilities. They must be having home loans, car loans, and many other loans. Before thinking about any other goal, they would have to pay off their debts and liabilities. In case, the couple from the above-mentioned example, Ravi and Keerti are facing the same situation they must purchase a Mortgage redemption insurance plan and ULIP plan. By this, they can pay off their debts and also create assets to fulfil dreams like a world tour or a fancy holiday.

6. Tax Savings

Tax saving should not be considered as the major objective behind the purchase of the life insurance policy. There has been an increase in the tax exemption limit up to INR 1.5 lakh and so, there is a provision of an additional income of INR 50,000 more. This additional income needs to be channelised into the insurance plans which are investment-linked for achieving capital appreciation. Additionally, there are tax benefits on life insurance as per the section 80C and 10(10D) of Income Tax Act, 1961.  


Life insurance planning is important not only for every individual but also, for working couples. They have income from two sources and have several plans which are dependent on both these sources. Proper insurance planning would help conveniently achieve their financial goals.

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