What are Joint Life Term Insurance Policies?
Table of Contents
Progressive times lead to innovative variations. A joint life insurance policy is one such innovative plan structured according to the changing world where both spouses earn and manage their household. Let's dive into different aspects of a joint life term insurance policy.
What are Joint Life Term Insurance Policies?
A joint life term insurance plan offers coverage to both spouses, business partners or even parents with a child under one plan. This helps ensure that the surviving policyholder would retain financial stability in the face of an unfortunate event. Moreover, a joint life term insurance plan is cheaper than individual policy plans.
How Does A Joint Life Term Insurance Plan Work?
The premium is paid for the specific tenure by the partners to ensure the validity and continued coverage of a joint life term insurance plan. Suppose one partner passes away within the policy tenure, the surviving partner will be compensated with the death benefits. Moreover, if both spouses die before policy completion, the beneficiary can claim the death benefits. However, the cover would expire after this, and the surviving partner would have to buy a new policy plan.
What Makes a Joint Life Term Insurance Plan Different?
The points mentioned below describe the unique features of a joint life term insurance policy.
1. Policyholders
A primary differentiator which makes a joint life term insurance plan unique from a regular term insurance plan is the number of policyholders. Two life assured can be offered life coverage under the joint life term insurance plan than the standard term insurance plan, which provides coverage to only one life assured.
2. Contract
A joint term insurance plan can help spouses, parents and children and business partners get a policy with the same terms and conditions compared to the regular term insurance plan, which provides different plans and different terms and conditions. This helps in saving premium payments of individual policies.
3. Recipient of Death Benefit
The death benefit is given to the surviving life assured if the other policyholder dies, whereas, in the case of a regular term insurance policy, the beneficiary or a nominee receives the amount after the policyholder's demise. The beneficiary is only paid when both the joint life term insurance policyholders die within the policy term.
Benefits of Joint Life Term Insurance Plans
Here is the list of benefits offered by a joint term insurance plan.
1. Cost Effective
The financial burden of paying separate premiums on individual term insurance policies can be avoided in the joint term life insurance plan. Moreover, a broader coverage than a separate term life insurance policy is offered in a joint life term insurance policy.
2. Waiver Of Premium
A waiver on future premium instalments is provided to the surviving life assured if the other policyholder passes away.
3. Income Replacement
The surviving life assured is offered monthly death benefit payments if the partner dies before policy completion. This acts as income replacement for the surviving life assured and helps in meeting the day-to-day expenses of the family.
4. Tax Benefits
Under Section 80C of the Income Tax Act, the life assured who makes the premium payments under the joint life term insurance plans will enjoy certain tax benefits. They can save up to Rs. 1.5 Lakhs in a year.
Endnotes
A joint life term insurance policy can be genuinely beneficial for spouses and partners who don't have the budget to pay for individual policies. Moreover, the cost-effectiveness and tax benefits offered makes it a pretty desirable plan. It is advisable to read through all the terms and conditions of different plan options provided by various insurers before choosing the one for yourself and your partner.
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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
