It’s unpleasant to contemplate the loss of a wife. However, if it’s not talked about, and plans made to support your family in even these, the most terrible of circumstances, the occurrence worst case can leave you reeling.
It is important to plan for end of life, simply because the alternative can heap financial pressure, on top of an already terrible situation. After getting the wife’s approval, which is a prerequisite for taking out insurance for her, the first thing that needs to be done is research: there are two broad categories of insurances that you need to pick from: term insurance and whole life.
Term insurances refer to policies that have a fixed period – be it 5 years, or 10, or even a single – and provides the entire face value to the insuree, in case the insured dies within this period. If that does not occur, the insurance needs to be renegotiated, at possibly higher rates.
Whole life, on the other hand, generally extends till the end of life, with equity constantly building up under the policy. Many companies allow this equity to be borrowed against. This kind of insurance can be quite helpful for estate planning and other asset related functions; term insurances, on the other hand, are largely used to cover loss of income for a while, and end of life expenses.
Both require two things: firstly, the insured’s health to be above some fixed baseline, where the worse the health conditions, the higher the premium. Secondly, to insure your wife, you need to prove that you have an insurable interest that suffers with her loss. Given these preconditions, you can choose what kind of life insurance you wish to buy for your wife.