Everyone wants to protect themselves from any financial crisis from the uncertainties of life. Having a term insurance plan is a reliable way to deal with financial uncertainties. It doesn’t matter whether you are married or single, term insurance safeguards your family financially in case of any unfortunate incident. It offers many other benefits to the insured.
In the last couple of years, the demand for joint term insurance is rising quickly among couples. The joint terms insurance provides the premium amount as well as it offers life coverage for both individuals. If you are not sure how the joint term insurance plan is different from a general term insurance policy, read on. Here you will know everything about a joint term insurance plan in India.
What Is Term Insurance
A term insurance plan is quite similar to a traditional life insurance policy. It offers life coverage to the insured in exchange for payment of the specified amount until the term expires. That means when the insured passes away before the policy’s term expiry, the nominee or the legal heirs will get death benefits in the form of a lump-sum amount.
However, the key difference between a traditional life insurance plan and a term insurance plan is the maturity benefits. This means, in case the insured is surviving until the expiry of the term, no benefits will be provided whereas the traditional life insurance policy provides monetary benefits after maturity. So, the premium amount in term insurance is very low as compared to traditional life insurance. Now let us understand about a joint insurance policy.
Joint Term Insurance Plan
In case of a joint term insurance policy, both you and your partner in the contract get death benefits. Again, a joint term insurance plan also does not provide any maturity benefits. That means if both of you survive till the expiry of the term then no benefits will be provided. Whereas, if either you or your partner passes away before the term, then the benefits will be provided. Here your partner could be your spouse or children or even business partners.
How Does Joint Term Insurance Plan Work?
Now let me explain how a joint term insurance plan works. This will help you decide whether it is the right for you or not.
- A joint term insurance plan covers death benefits to the insured on the first death basis.
- In the case of the death of anyone of two insured people, death benefits will be provided to the surviving policyholder.
- Whereas, if both of the policyholders pass away simultaneously due to any unfortunate circumstances, the nominee will get the death benefits.
- However, most of the term plans available in the Indian market are paying only half of the assured amount to the partner whereas you will get the full amount if your partner passes away.
For example, if you purchase a term plan of 10 lakhs with your partner. Then your partner will get death benefits of 5 lakhs if you do not survive with the term. In case your spouse passes away during the term, you will get full 10 lakhs coverage. However, if both you and your partner pass away, the nominee will get 15 lakhs as death benefits.
Now let us look at the difference between a regular term insurance policy and a joint term insurance policy.
How Can You Purchase a Joint Term Insurance Plan?
You can purchase a joint term insurance plan via online mode as well as offline. Here is how you can buy your term plan online.
Purchase Joint Term Insurance Policy Online
- First, visit the official website of the insurance company that you prefer.
- Find the term insurance policy from the available insurance product list.
- Go through the terms of different joint term insurance policies carefully and select the policy of your choice.
- Make sure that you are completely read the terms and aware of the total amount to be paid for the policy. You can also use the insurance calculator provided by the official website.
- Now fill the online application form, enter all the required details in the form and submit. You may need to provide the Know Your Customer documents as proof.
- Pay the first premium after filling the application form. You can pay it through credit card, debit card, internet banking, and some of the insurance companies are now accepting UPI payments too.
- Once the payment is made the policy documents will be sent to your address.
Purchase Joint Term Insurance Plan Offline
If you want to purchase your joint term insurance plan offline, you can visit a branch office of your favorite insurance provider with your partner with the required documents. You can also take the help of an insurance agent who can help you do this for you. If you are looking for investment opportunities, you can read one of my previous posts where I have mentioned the best investment ideas for beginners.
Benefits of Joint Term Insurance Plans
Well, there are many benefits of a joint term insurance plan. I have only mentioned a few major benefits below.
- Tax Benefits: The premium of the joint term insurance policy can be used for tax deductions. That means the death benefits are exempt from tax liability. However, tax regulations change from time to time, you can
- Cost-Effective: A joint term insurance policy is better than two regular term insurance plans in terms of cost. It is expensive to have two policies rather than having a single joint policy in the long run. So, it helps to save some money with a joint insurance policy.
- Regular Monthly Payments: Some of the joint insurance policies also allow you to give you pay as regular monthly payments.
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Regular Term Insurance Plan vs. Joint Term Insurance Plan
Understanding the key difference between a regular term insurance plan and a joint term insurance plan will help you decide which term plan is best according to your requirement. Here is how joint term insurance plans are different from regular term insurance plans from various aspects.
- In the case of a regular term insurance policy, it allows life cover for a single policyholder. Whereas, in a joint term insurance plan, it provides life cover for both you and your partner so two life covers.
- In a regular term insurance plan, only a single person is allowed for the contract under a single policy. But two people are allowed to hold a joint term insurance policy, which means a single contract can hold two life covers.
- Another key difference is the nature of the benefits of death. In the case of regular term insurance plans, the nominee will directly receive the death benefit if the insured person passes away. Whereas, in joint life insurance plans, the nominee does not receive any death benefits if one of the policyholders passes away. All death benefits will be given to the surviving policyholder. The nominee will receive death benefits only when both the policyholders pass away during the term.
Hopefully, the above information helped you to understand what is the joint term insurance policy. I hope you are fully aware of the joint term insurance policy. As you know there are many benefits of a joint term insurance policy, now you can choose a policy to protect you and your partner from any uncertainties.