Can We Buy Joint Life Term Insurance Policies?

As per the popular perception, 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.

What is It?

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 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 options that are available:

(i) Some policies pay out 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 individual respectively. The amounts may vary depending on the terms and conditions.

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

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

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

Is There A Need for Joint Term Insurance Plans?

With changing social structure and both the partners bringing in income, it is important that the family is 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 of 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 the 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 the partners. This way the nominees/dependents can derive 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 favour of joint term insurance plans like the ease of acquiring a policy, less of paperwork and the ability to manage the policy easily.

So, it is important to apply an individual discretion while deciding the kind of policy you want to buy. Explore about 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.

Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

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