Joint Term Insurance Plan

What is a Joint Term Insurance Plan?

A joint term insurance plan can be bought by two partners together by paying premiums for a single policy. It offers a cost-effective way to get term insurance for two individuals. If one of the policyholders passes away, the death benefit is given to the surviving partner, and the policy terminates.

Joint term insurance plans are not limited to husband and wife. Any two people can purchase the policy, such as a parent and a child. The premiums are paid at regular intervals as chosen at the inception of the plan.

We have provided an illustration to understand how a joint life plan works.

Types of Joint Term Insurance Policies

There are two main types of joint term insurance policies that you can choose from. Understanding both these types is important.

First to Die Joint Life Insurance

This type of joint life insurance provides benefits on the death of either insured partner. This plan offers financial safety to the surviving partner so that they can maintain a comfortable lifestyle.

Second to Die or Survivorship Joint Life Insurance

This policy provides benefits to the nominee on the death of both policyholders. Its primary goal is to protect assets or create wealth for the heirs.

Top Joint Term Insurance Plans in India

Here's a list of top joint life term insurance plans in India:

Benefits of a Joint Term Insurance Plan

Key benefits of a joint term plan include:

Cost Saving

Paying premiums for a single joint term plan is more economical than buying two separate policies. Therefore, a joint term plan is a cost-effective way to ensure the lives of two people at the price of one.

Income Replacement

Some joint term insurance policies offer a specified amount as regular monthly payments after the demise of the first policyholder and a death benefit to the nominees after the demise of the second policyholder. These monthly benefits are intended to replace the regular income.

Tax Benefits

The customer can claim the policy premiums as tax deductions under Section 80C of the Income Tax Act, 1961. Death benefits are tax-free under Section 10(10D) of the Income Tax Act.

How Joint Term Insurance Plans Work?

Here's how joint life term insurance plans typically work:

• Many joint term insurance plans operate on a 'first-death' basis.
• The surviving policyholder receives a lump sum payment in the form of a death benefit if one of the two insured persons dies during the policy term.
• If both insured members die simultaneously, the sum assured is paid as death benefits to the nominees or legal heirs of the insured.

How Joint Life Insurance is Different From a Regular Term Insurance Plan?

Joint term insurance plans and regular term plans differ significantly. Here's a comparison:

• Death Benefit Payouts: A regular term insurance policy pays the sum assured directly to the nominee or legal heir. Under a joint term insurance policy, it is paid to the surviving insured policyholder. In case of the death of both policyholders in a joint plan, the nominee or legal heir receives the death benefits.
• Nature of Contract: A regular term plan requires two separate policies for two individuals, each with its own terms. A joint plan covers two lives under a single policy with unified terms.
• Number of Policyholders: A joint term policy provides two life covers, whereas a standard term life insurance policy only covers one policyholder.

Companies That Provide Joint Term Insurance Plans

Advantages and Disadvantages of Joint Term Insurance

With more women entering the workforce, joint term insurance policies have gained prominence. These policies cover both partners under a single plan, offering a unified safety net.

Advantages of Joint Term Life Insurance:

• Affordable in comparison to two-term plans: Term insurance plans are already affordable. A joint plan further enhances cost savings by covering two individuals under a single policy.
• Tax saving: Joint term life insurance policies are eligible for a tax deduction under Section 80C of the Income Tax Act, 1961.
• Numerous payout options: A joint term life insurance policy comes with various payout options. The surviving partner can opt for a lump-sum payout or a lump sum with a regular income payout.

Disadvantages of Joint Term Life Insurance:

• Single death payout: A joint term policy typically offers a single payout upon the death of one policyholder. If both policyholders pass away, the nominee receives only one death benefit, unlike two separate policies which would provide two.
• Potential for Burden: If one policyholder defaults on premiums or in case of separation, the other partner might bear the entire premium burden or need to convert it to a single-life policy.
• Can Become Expensive: While generally cost-effective, adding multiple riders and opting for a very high sum assured can increase the overall premium, making the plan less affordable.

Who Should Buy a Joint Life Policy?

Generally, a joint life policy is designed for couples and offers cost-effective protection in the long term. Upon the death of one spouse, the surviving partner receives the life cover and is often exempt from paying future premiums to keep the policy active.

Aside from couples, it is also beneficial for business partners. It allows business partners to use a policy to secure their organization’s interests.

Parents can also purchase joint life insurance with their children to secure the child's financial future after both parents have passed away. The life cover can be used to protect the financial security of the child, like the costs of education, medical treatments, and regular expenses.

Factors to Consider Before Buying Spouse Term Insurance

Certain factors must be considered before buying the best joint term insurance plan. Let’s understand these factors in detail.

• Assess Family Expenses: To determine adequate life cover, evaluate your family's current and future financial needs and expenses.
• Policy Tenure: Ensure the policy tenure aligns with both partners' needs. If you have children, consider a longer tenure, possibly lifetime, to secure their inheritance.
• Premium Cost: Choose a premium that fits your budget to ensure consistent payments and avoid policy lapse.
• Optional Riders: Consider adding riders for enhanced coverage against specific risks, understanding that they come with additional premiums.

How to Buy a Joint Term Insurance Plan?

You can buy a joint term insurance policy through an online or offline medium. Here's how you can purchase one:

Online Mode

1. Visit the official website of the company you have decided to buy the policy from.
2. Find the policy from the product list and enter the requested details.
3. Choose a joint term insurance policy that meets your requirements.
4. Click on buy now and fill out an online proposal form.
5. Upload all the required documents.
6. Submit the completed proposal form and documents.
7. The company will send you the soft copy of the policy documents in your email.

Offline Mode

To buy a joint term insurance policy offline, you must visit the nearest branch of your chosen insurance company with your spouse and fill out the necessary documents and submit KYC proofs to the insurance company.

Conclusion

A joint term insurance plan offers comprehensive protection for your family. It can be easily purchased online or offline. Ensure timely premium payments to keep your policy active and enjoy its benefits.

If you are confused about which joint term life insurance policy is best, you can visit PolicyX.com or call us at 1800-420-0269. We offer expert, unbiased insurance advice.