Joint Life Insurance Policy – Everything You Need to Know

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What is Joint Life Policy – Meaning, Types & Benefits Details

Joint life insurance policies have become very popular and knowing more about them can help you too in making the right policy purchase.

What are joint life insurance policies?

A joint life plan can be defined as a plan that offers coverage to two individuals at the same time. Normally these policies are offered to wives and husbands. Such policies guarantee the financial security of the family in case one of the two policyholders dies within the policy coverage period. However, you have to make sure that you are paying the premiums of these policies as per schedule. In that sense, they are just like the individual term plans.

In a joint life policy if one of the policyholders dies the sum assured is paid to the other policyholder. However, in such cases, the policies are also regarded to have expired. Still, if the surviving individual wishes to extend the coverage they can always buy an individual term plan. As we have said already, these plans work based on the first death. This means that if one of the two policyholders dies within the policy coverage period the other person can file a claim to be reimbursed under the terms and conditions of such a policy.

Types of Joint Life Insurance Plans

These plans can be categorized into two broad categories – joint term life insurance and joint life endowment insurance. A joint term plan is just like a normal term policy. In this case, the policyholders would pay the premium for a certain time so that the plan continues to cover both of them. During this time, if one of the two policyholders passes away the other one can always file a claim. However, once the insurer settles the claim it would stop the policy.

The endowment version of the joint life insurance policy offers you the twin benefits of investment and insurance.

These policies however have a cap regarding the time for which they would function. This is normally till the time you retire. If you survive when the policy matures you would receive an amount from the insurer – this particular amount is referred to as endowment. So, as you can see for yourself, these plans work just like a normal endowment policy. So, let us say one of the two policyholders dies within the coverage period. In that case, the other person would get the sum assured amount.

Reasons to buy Joint Life Insurance Policies 

There are several reasons why you should be getting a joint life insurance plan, and they may be enumerated as below:

  • the premiums are low
  • you get extra money
  • you have financial protection for your family
  • you get coverage of 50% of life cover
  • in case both of you die at the same time, the life cover is distributed among the nominated beneficiaries
  • in some of these policies, the surviving policyholder also gets a premium bonus in case the primary policyholder dies within the policy coverage period

When you think of the benefits of a joint life insurance policy the first thing that comes to your mind is the low premium rates. That way, you do not experience any difficulty in carrying on with the plan and you can secure two people for the price of one. In some of these plans, there is a provision whereby the surviving policyholder can receive a regular income in case one of the policyholders dies. These policies are also great options for procuring some financial protection, especially for the nuclear families and the younger couples.

Features of Joint Life Insurance Policies 

Following are some of the noteworthy features of these policies that you can be sure you would get if you buy the best joint life insurance policy in India:

  • they offer you financial security
  • the beneficiaries stand to gain financially
  • you can choose just as you want to
  • you can save money on taxes

Let us say that your spouse died during the policy coverage period. In that case, you would get the sum assured amount guaranteed by the policy. In cases where both the policyholders die at the same time, the money gets distributed among the surviving nominees.

Benefits of Joint Life Insurance Policy 

It is the benefits of these policies that make the joint life insurance for married couplessuch a viable financial proposition. Come let us take a look at them:

  • you get the option of a single premium
  • they are economical
  • you do not need as much documentation as in some other kinds of policies
  • you get a replacement of income if you need the same

For starters, in these policies, you can cover two people for the price of one. When you compare the premium rates of these policies with the individual plans you can see the kind of money that you can save on the first.

Who are eligible to get Joint Life Insurance Policy?

In general, a joint life insurance policyis said to be the best option for married couples. This is because it helps them save money and in the long run it is as effective as it gets. Even if one of the policyholders dies within the policy coverage period the other person becomes eligible to receive the total coverage amount that is assured by the policy. They can also opt to keep the policy going and do not have to pay any premium for the same.

Conclusion 

One thing that is certain about life is that it is fully uncertain. This is why you at least need to make sure that you are financially prepared to deal with the rigors of the same, and this is where the likes of a joint life policycan prove to be so very helpful in every sense of the term. This way, you can make sure that even if you suffer a premature death at least your family would be financially prepared to deal with the aftereffect of the same. As far as the couples are concerned, joint life insurance plans are always the best option for sure.

Also Read: Top 8 Life Insurance Myths in India and Facts

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Gayatri Prabhu, Head-Digital Business at Mahindra Insurance Brokers Limited (MIBL) is one those few digital leaders who has the width and depth that is required to execute an ROI driven holistic digital strategy. She cuts through the noise, identifies the critical levers and leads her team to successful execution of the defined strategy. Her core mantra to win new and retain existing customers is: understand the consumer behavior and craft experiences around it.

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