Joint Term Life Insurance Vs Two Separate Term Insurance Plans – Know Meaning, Advantages, Differences and Things to Consider


6 min read

Wondering which one should you go for Joint Term Life Insurance or Two Separate Term Plans? The term life insurance has become an integral part of our life and most of us have bought one to lead a healthy and hassle-free life. A term insurance policy offers a guaranteed death benefit to the nominee in case of the untimely demise of the policyholder. The family members of the deceased insured receive a huge amount from the insurer as a death benefit. Thus, the popularity of term insurance is rising as it offers lump sum assured amounts at a minimal premium rate.

To secure the future of your family members, you need to understand which one will give you the maximum benefits: a joint term insurance plan or a separate one.

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What is Joint Term Life Insurance?

A joint term insurance plan is a new-found concept which is getting popular as women start to lead a financially independent life by progressing in their career. Women today are also contributing to the household’s income. So it makes all the more sense that both partners need to be insured, and thus the popularity of joint term insurance plan. Joint term insurance is a typical term insurance policy plan where both partners are covered under a single insurance policy. If any of the partners under the covered policy dies untimely during the policy tenure period, the surviving partner will get the death benefit sum assured from the insurance company.

How Does Joint Term Life Insurance Plan Work?

A joint term life insurance plan works like a normal term insurance policy. The prime difference between the policies is that a term plan covers only a single individual, but a joint term life insurance plan gives protection to both individuals under the same plan. Apart from this, other features (the fixed coverage tenure, premium payment for both partners, and premiums) are the same for both policies. In case of the sudden demise of any insured person before the policy tenure period, the remaining partner is eligible for the death benefit payout. These days, you will get many joint term life insurance quotes online from various portals.

Claim Payment Options of Joint Life Term Insurance Policy

If you purchase joint term life insurance plans, you will get various options. These could be,

(i) In case of the demise of any one of the policyholders, the surviving partner will get the sum assured as a death benefit from the insurance company. This is usually paid in a lump sum. After that, the policy will be annulled.

(ii) After the demise of one of the policyholders, the sum assured will be paid to the one alive and also the policy stays active and provides insurance cover till the end of its scheduled term, or till the other policyholder also passes away, whichever happens early. Under this scenario, the insurance company may or may not waive the future premiums under one policyholder’s death.

(iii) After one of the policyholder dies, the sum assured will be offered to the remaining partner as a death benefit. The partner will receive a lump sum amount along with regular payouts for a fixed period in the future.

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Also Read: Joint Life Insurance Policy – Everything You Need to Know

Advantages and Benefits of Joint Term Life Insurance

1. Can Save a Humongous Amount on Premium

Term insurance plans will never burn your pocket. But the premiums of two individual term plans will be much higher than the premium of a joint term life insurance plan. As a result, you may face some financial difficulties while paying the premiums for two separate plans. To overcome this issue, modern couples prefer joint term life insurance plans. Under this type of plan, they will not only be covered by a single-term plan but also save premiums at the same time.

2. Offers Multifarious Claim Payout Options to Customers

If you are looking for multifarious claim payout options, then joint term life insurance plans could be the best choice as they offer buyers an array of options. Every policyholder requires a customized option while looking for a claim payout. With joint term life insurance plans, you will get more customized options. These plans encourage policyholders to choose the best options according to their requirements.

3. Helps You in Tax Savings

Like other life insurance policies, joint term life insurance plans also come with tax benefits which policyholders can enjoy. The premiums and the benefits paid towards the joint term life insurance plan are eligible for a tax deduction (under the Income Tax Act, 1961).

4. The Customers May Get Multiple Riders

Like all other life insurance policies, joint term life insurance plans welcome their policyholders with multiple riders to strengthen the coverage of the plan. The accidental death benefit rider (offers death protection caused due to an accident) and terminal illness benefits (if the policyholder has been diagnosed with any critical illness, the benefit will be given to him/her) are two popular riders that you can enjoy with a joint term plan. But your premium amount will increase if you want to enjoy the benefits of these riders.

5. Can be Maintained Easily

To enjoy the insurance coverage benefit without any interruption, you should pay all your premiums on time. It is a task to remember to pay your premiums on one policy let alone two.. But with a joint term life insurance policy, instead of paying two premiums, you need to pay only one. Both partners have equal access to the insurance account; hence anyone can pay the amount to enjoy the benefits of the joint term life insurance plan.

 Things to Consider While Buying a  Joint term life insurance

  1. Calculate the premium and Compare : The joint term life insurance plans will not hit your pocket as they are affordable. By using the joint term life insurance premium calculator, you must calculate the premium and compare it with other available plans. After precisely comparing all available plans, you can handpick the best joint life insurance policy.
  2. Do your Research: Since this is a new-fangled product, hence proper research is recommended before making any commitment. Thoroughly judge the coverage and benefits offered by various joint term life insurance plans and separate term insurance policies and then, invest prudently. Prefer a joint term life insurance policy that allows you to switch to another option in future (in case of separation).

A joint term life insurance insurance policy could be the best option for couples who are looking for combined financial planning. This type of policy is not only affordable but also safeguards your loved ones against all untoward events.

Also Read: What Medical Tests are Required for Term Insurance?

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Jun 30, 2022
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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