- Cover Both Partners
- How it Works?
- Types of Joint Life Plans
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.
-
Joint Term Plan
To put it simply, it is a basic term insurance plan that offers coverage for two policyholders in a single plan. Upon the unfortunate death of one spouse, the cover is paid to the other spouse, and the surviving partner’s coverage continues.
Some term insurance policies waive off the future premiums for the surviving partner as well. However, there is no money-back option in a joint-term insurance policy -
Joint Endowment Plan
The joint endowment plan is similar to other endowment plans and provides both investing and insurance benefits. At the end of the policy term, the insurer will pay you a sum of money, which is referred to as an endowment. Upon the unfortunate death of the one spouse, the other policyholder gets the death benefit claim.
Benefits of Joint Life Policy
Here, we've listed some benefits associated with a joint life insurance policy.
-
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.
-
Various Payout Options
A joint-term plan provides flexibility to choose the payout term based on the policyholder's requirement.
-
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.
-
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.
-
Couples
A Joint Life Insurance is the best way to secure both partners in a single plan at pocket-friendly premiums. Upon the death of either spouse, the insurer will pay the death benefit amount to the surviving spouse. -
Business Partners
A Joint Life Policy is also beneficial for business partners. It allows business partners to use a plan to protect their company interests. -
Parents
Parents can choose to buy a joint life plan with their kid to protect their child future future in the event of the parent's untimely death. The payout amount can be used to secure the financial security of the kid, such as the costs of education, medical treatments, and regular expenses.
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.
Joint Life Insurance policy: FAQ& 039;s
1. Who can take a joint life policy?
Typically, a joint life policy is designed for couples, but it can also be taken by business partners and parents for their kids.
2. What is the benefit of joint life insurance?
With joint life insurance, you can save time and the hassle of maintaining two separate plans.
3. What are the types of joint insurance?
There are two types of joint life insurance products: a joint term plan and a joint endowment plan.
4. Is joint life insurance better?
With a joint life policy, you can add two individuals while paying a payment for a single plan.
5. Can I add my housewife to my joint life insurance?
Under joint life insurance, the housewife is eligible for a life cover equal to 50% of the life cover.
Life Insurance Companies
Share your Valuable Feedback
4.6
Rated by 855 customers
Was the Information Helpful?
Select Your Rating
We would like to hear from you
Let us know about your experience or any feedback that might help us serve you better in future.
Written By: Sahil Singh Kathait
A boy-in-squares bagging escapades of switching streets in groove & sensing musical airy-notes from 6 1". Under wayed nyctophile sketching the walls of life from the panorama of anime.
Do you have any thoughts you’d like to share?