The couple fled to Australia on false papers and might have escaped justice had Mrs Sanchez, 41, not returned to Britain to attend her sister's wedding. She was arrested at Heathrow and jailed for two years in 2010.
Following her conviction, the authorities began extradition proceedings to bring Sanchez back to Britain and he was jailed for five years.
Oxford Crown Court heard that Sanchez was working as a web designer for HMV and living in Farnham, Surrey, when he came up with his plan in 2003.
Over the following year he took out seven separate credit cards and built up large debts, before applying for a £500,000 life insurance policy.
He also had loans with payment protection that would be paid in full in the event of his death.
In August 2004 he and the family rented out their home and moved to Costa Rica, but a series of investments failed and the following year they were forced to return to Britain.
Sanchez took out another series of loans before flying to Ecuador alone. In 2005 his wife informed the authorities that her husband had died and his remains had been cremated. On production of his death certificate she collected large sums from the insurers before returning to Central America. She also received a death benefit payment of £112,000 from HMV and began to receive pension payments.
The couple then moved to Sydney, but the authorities had already uncovered their plot due to an attempt by a friend of Sanchez, Malcolm Jackson, to use the HMV staff discount card. Simon Heptonstall, prosecuting said: "This scheme began to unravel with a simple CD purchase. Mr Sanchez had given his staff discount card to a good friend, having said it had been approved by HMV."
Mr Jackson was arrested and tried to ring his friend from the police station. Sanchez hung up but inquiries uncovered the fraud.
Sanchez was extradited from Australia in March following a request from Thames Valley Police's economic crime unit.
Dc Jacqui Bartlett, of the unit, said: "Today's result is the culmination of a five-year investigation in order to bring Mr Sanchez to justice.
"Mr Sanchez and his wife orchestrated a fraud in a bid to obtain a large amount of money and believed they had got away with it. Mr Sanchez then started a new life in Australia, which was known to both his and his wife's families, unaware his crimes would eventually catch up with him."
Sanchez admitted 12 fraud offences at a previous hearing and, sentencing him, Judge Gordon Risius said: "I sentenced Sophie Sanchez to two years in prison having given her credit for pleading guilty, for her previous good character and because the fraud had clearly been masterminded by you.
"More importantly, she had been swept into it by misguided loyalty to you as a husband and the father of her four children."
