Under the Joint Life Insurance Plan, two individuals are covered under a single plan, which is basically meant for couples. This plan ensures the financial security of family members in case of the sudden demise of any of the insured. This means it covers both husband & wife, whether both of them or either of them is working.
This plan is ideal for couples to get a combined life coverage at an affordable premium rate. Any two members of the family can take advantage of this plan, i.e., the husband & wife, siblings, parent & child, etc.
How Does a Joint Life Policy Work?
- Under this plan, the surviving partner receives the sum assured when the other partner dies. The mode of disbursement of the sum assured can be either in a lump sum or a regular monthly income mode.
- This plan is based on the first-death basis, which means the death benefit would be paid to the surviving partner, & the premium amount would remain to be paid irrespective of the working status of the surviving partner.
- In a much unforeseen circumstance, where both partners die, the death benefit would be paid to their beneficiaries.
- The surviving partner receives only the death benefit & no amount over & above that.
- The homemaker partner is eligible to receive 50% of the sum assured towards the spouse.
- The sum assured will be provided to the surviving partner as a death benefit, which includes a lump sum & regular payments.
Who Should Opt for a Joint Term Life Insurance Plan
Provided is the list of individuals who should opt for a joint Term Insurance:
- Young Married Couple
This plan should be opted for by the young married couple during their 20s & 30s, starting with their careers & having a young family.
- Dual-Income Household
A couple where both husband and wife make financial contributions to the household.
- Blended Family
This means a couple having children from previous relationships.
- Couples with Significant Age Gap
Couples having a significant age difference.
Why is a Joint Life Term Plan Beneficial?
Provided are the benefits of Joint Life Term:
- Cost-Effective: This plan offers a lower premium amount than an individual plan.
- Financial Security: Knowing that your family would be financially secure in the event of a mishap brings mental peace.
- Income Protection: This plan helps maintain the same lifestyle & provides financial stability in case of the demise of one of the partners.
- Estate Planning: It offers financial security for all family members, irrespective of whether they are biological children or not.
- Level Coverage: There will be a consistent death payout irrespective of which partner dies first.
- Flexibility: Some plans also offer flexibility in deciding the death benefit for both individuals, which will help consider their individual requirements.
Types of Joint Life Policy
Provided are the different types of joint life policies:
- Joint Life Term Insurance Plan
This plan is just like a basic plan, where spouses are covered jointly & can claim the amount in case of the sudden demise of the other on payment of the regular premium. This type of policy matures either on completion of tenure or the demise of both the policyholders, whichever is earlier.
- Joint Endowment Plan
Under this plan, both policyholders are required.
How to Choose an Appropriate Joint Term Plan?
Provided are the steps to be performed to choose an appropriate joint term insurance:
- Assess Your Needs:
1. Coverage amount:
Determine the amount of coverage required to fulfill the needs of your family members, ensuring financial support to maintain their lifestyle & cover expenses. You may use a term insurance calculator to get an estimate of the sum assured, considering income, expenses, liabilities, age, etc.
2. Policy term:
Select a policy duration that well aligns with the requirements & future financial goals.
- Riders:
Determine whether additional riders, such as critical illness riders or accidental riders, etc., are required, depending on the current financial status & risks involved.
- Compare Different Plans:
Look for different plans available considering your present family position, inflation factor, debts involved, total family income, etc.
- Consider these additional points:
1. Joint life vs. individual policies:
Compare the benefits & drawbacks of individual & joint policies.
- Health Factors:
Inform your partner & your health history honestly at the time of buying a policy so as to avoid any future complications.
1. Seek professional guidance:
To understand the insurance-related terms, make a comparison of plans, understand the complexities, select a plan that best matches your requirements, & seek professional guidance. They will help you view insights into the plan & help you make an informed decision.
Difference between Joint & Single Term Insurance Plan
Provided are the differences between the Joint & Single Term Insurance plan:
| Basis of Difference | Joint Term Plan | Single Term Plan |
| Number of Contracts | This plan includes spouses under a single plan | This plan covers an individual only depending upon his/ her requirements. |
| Sum Assured | This plan can be opted for when there is a joint liability. | This plan includes life coverage for individual persons. |
| Premium Cost | Comparatively Lower | It is generally higher if two single plans are considered against a joint plan. |
| Coverage Duration | To be agreed upon mutually. | To be agreed upon by the individual himself. |
Conclusion
Joint Life Policy is an appropriate choice for couples seeking to be financially secure under a single plan. The plan should be such that it can be managed easily, with extensive coverage, a cost-effective premium, & offer mental peace. Buying a joint policy is considered to be cheaper than buying an individual plan. This plan is not confined to the husband and wife only, i.e. siblings, a parent, & a child can also buy this plan by paying a premium amount on a regular basis. Under this plan, the death payout is based on a first-death basis, i.e. when the first policyholder dies.
Anantha Nageswaran is the chief editor and writer at TheBusinessBlaze.com. He specialises in business, finance, insurance, loan investment topics. With a strong background in business-finance and a passion for demystifying complex concepts, Anantha brings a unique perspective to his writing.
