What is a Joint Life Insurance policy?

No one can buy love with money, but you can secure your partner's life with it. With a joint life insurance policy, you can cover your partner with you under the same plan.

Typically a joint life plan is designed for couples, but it can also be taken by business partners and parents with one of their kids. It is an affordable alternative that offers coverage for two individuals under a single plan. However, the premium is much cheaper as compared to paying for two different policies and should be paid in regular intervals, just like an individual term plan.

Upon the demise of the primary policyholder, the death benefit is given to the surviving partner. Later, when the surviving partner passes away, the death benefit goes to the nominee, and the policy lapses. Please note that there is no survival benefit associated with joint life insurance.

Let's learn more about how joint life policy works in detail so that you can make an informed choice.

Key Points to Remember While Buying Joint Life Policy

• For 2 individuals to buy a joint life policy, either one of them has to be working. It can be bought by a salaried individual as well as a self-employed one.
• If the husband dies, and the wife is working, she receives the death benefit of the husband and her policy continues as she pays premiums.
• If the husband dies and the wife is a homemaker, then she receives the death benefit, and her future premiums are waived off but the life cover continues.
• Upon the unfortunate death of both spouses, the life cover is distributed to the policy's nominee or legal heir.

How Does Joint Life Insurance Policy Work?

Let's understand how joint life insurance functions with the help of an example.

Meet Varun

Varun is a 30-year-old healthy and non-smoker male

Purchased a Joint Life Insurance Plan

Varun buys a ₹1 crore joint life insurance plan with his wife who is a homemaker.

The life cover is divided into 2 parts:

Varun - 1 Crore
His Wife - 50 Lakhs

Unfortunate Death

During the policy tenure, his wife suffered an unfortunate death due to an accident.

Death Claim

Varun received ₹50 lakhs as a death benefit, and now the remaining life cover is his share of 1 crore.

After Claim

Varun can use the payout amount to pay for household expenses. His policy will continue untill he passes away. His death benefit will go to the nominee.

What are the Types of Joint Life Insurance Plans?

The following types of joint life cover plans are available.

Benefits of Joint Life Policy

Here, we've listed some benefits associated with a joint life insurance policy.

1. A Joint Life Policy is Less Expensive

   Buying separate plans for both spouses can be expensive, but with a joint life policy, you can add two individuals while paying a payment for a single plan.

2. Various Payout Options

   A joint-term plan provides flexibility to choose the payout term based on the policyholder's requirement.

3. Income Replacement

   Upon the unfortunate death of the primary holder, the other spouse can choose a payout amount to substitute the primary spouse's income source. It'll help them continue with their life with a constant stream of income.

4. Tax Benefits with Joint Life Policy

   Joint Life insurance offers few tax benefits under Section 80C & 10(10D) of the Income Tax Act.

   • Under Section 80C, you can avail of up to ₹ 1.5 lakh tax exemption on premium paid towards the plan.
   • Under Section 10(10D), the maturity amount or death benefit is tax-free.

Who Should Buy a Joint Life Policy?

Typically, a joint life policy is designed for couples to offer coverage for two people in a single plan. However, the minimum or maximum age to be eligible for joint life insurance is 18 to 65 years. Let's understand who should get a joint life policy.

Conclusion

Now, you may be familiar with a joint life policy and its benefits, so you can decide whether it is suitable for you or not. Buy joint life insurance and give your partner more than just a momentary joy. Apart from a pocket-friendly premium, with joint life insurance, you can save time and the hassle of maintaining two separate plans.