Can We Buy Joint Life Term Insurance Policies?

As per popular perception, a life insurance policy has to be bought in the name of the bread earner (usually the man) of the house. Things are changing, though. With families becoming nuclear and both the partners contributing almost equally to the household income, it becomes imperative to ensure that both are insured to be financially stable in case of an untimely death of either of the partners. This is where a joint term insurance policy comes in.

Life is the most valuable asset of any individual, but it is also full of various risks and challenges. In such an unfortunate scenario, there is a serious situation where there is an income loss to the household. The situation is even worse when this individual is the sole earner of the family. In such situations, life insurance becomes very helpful. It acts as a security blanket for you and your family. 

Life Insurance Policy

Life insurance plans are of various types out of which a few plans are pure protection plans offering a death benefit, whereas the others are saving or investment plans offering death and maturity benefit (whichever occurs first).

How does Life Insurance Work?

Life Insurance is a long term contract (known as LIFE INSURANCE POLICY) between the Life Insurance Company (known as INSURER) and the person whose life is being insured (known as LIFE INSURED) for a specified tenure (known as POLICY TERM) giving an amount of money equal to the life cover (known as SUM ASSURED) by paying a cost (known as PREMIUM).

What Is “Joint Life Term Insurance”?

This is a policy that provides life cover as well as multiple benefits to you and your spouse. It is to ensure that your family remains financially stable in the event of the unfortunate death of either husband or wife.

What are the Benefits?

The joint term insurance plans offer a host of advantages depending on which insurance company you have bought the plan from. Let’s have a look at a few available options:

(i) Some policies payout on the first claim basis. This means the sum assured is paid out on the death of either of the insured partners and after that the policy lapses.

(ii) In certain plans, the nominees can claim the sum assured separately on the death of each respectively. The amounts may vary depending on the terms and conditions.

(iii) certain term insurance policies also provide a regular income to the surviving spouse for a fixed period in addition to the sum assured.

(iv) A few of the policies also offer additional benefits apart from the sum assured in case of death due to an accident.

(v) Besides these benefits, the premiums paid and benefits received under these plans are eligible for tax benefits too under sections 80C and 10(10D) of the Income Tax Act, 1961.

Is There A Need for “Joint Life Term Insurance”?

With changing social structure and both the partners bringing in income, the family must be insured against any unforeseen contingencies. Double income coming in covers a lot of goals and priorities for home loans, personal loans, household expenditures, and the likes. Passing away one of the partners can prove to be a major stumbling block in the ordinary functioning of the family. A joint term insurance policy covers such risks to a large extent and is, therefore, becoming a growing necessity. It also comes as a big support for those couples who are just starting their family and have big plans for the future. With small kids, a new vehicle loan, etc. a financial loss can lead to significant stress along with emotional vulnerability. These policies help the surviving partner to resume life smoothly.

Are These Better than Individual/Separate Plans?

It is an economical option compared to paying two different premiums for two separate policies for the same sum assured and almost the same features. Also, it would make sense to invest in a joint term insurance plan that offers to pay the sum assured separately on the death of both partners. This way the nominees/dependents can derive the maximum benefit out of the policy. The only downside to this is in the case of a divorce, this kind of policy can’t be divided. If one partner refuses to pay the premium anymore, the burden comes on the other one. There are a lot of other factors working in favor of joint term insurance plans like the ease of acquiring a policy, less paperwork, and the ability to manage the policy easily.

So, it is important to apply individual discretion while deciding the kind of policy you want to buy. Explore your family’s current and future requirements and accordingly proceed further to buy the best joint term insurance policy. If your decision is based on diligent research and sound rational thinking, you’ll buy the best plan to safeguard your family’s future in your absence.

Sonia Nagpal

Sonia Nagpal is an Insurance Specialist. She has more than 25 Yrs of experience in sales, Marketing and Corporate Alliances.

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