Guide to Joint Term Insurance Plans for Couples

Traditionally, the term insurance plans were focused on the main earning member of the family. But with a rapidly changing society, more women are taking up jobs and responsibilities outside households also. With growing uncertainties in today’s world, it is crucial to get coverage for self as well as the spouse. Though couples can buy individual life insurance plans , companies are now offering a joint term insurance plan for couples.Although term plans do not offer maturity and survival benefits as pure life insurance plans do, it is one of the most economical and convenient options available in the market. For example, you are a 25-year-old salaried individual, and your CTC is 5,00,000 rupees PA.You can choose a term plan that guarantees to provide twenty times your annual income, i.e. rupees 1 crore. Your beneficiary/ nominee will be getting the amount in case of your untimely demise. The premium required for you to pay will be up to rupees seven thousand in this case.In the case of a term insurance plan , the beneficiary of this policy gets the lump sum payment when the insurer dies. Along with the lump sum amount, the beneficiary will also receive rider benefits and other value-added benefits. If you want to make sure your loved ones are financially secure in case of your untimely and unfortunate death, make sure you buy a term insurance plan as soon as possible.Also, knowing the difference between joint term insurance and individual term insurances will help you choose a plan that ticks the right boxes for you and your loved ones. Joint term plans are the most preferred type of policy in couples. But make sure you learn as much as you can about these policies and choose the type that suits your requirement and fits your preference. Also Read: Different Types of Life Insurance Policy

With joint term insurance , you can avail a comprehensive coverage for you and your partner under a single policy. Both, the husband and wife are insured, and one gets the coverage amount in case of death of the other. Hence, the family is protected financially if anything happens to either one of them.There may be other benefits provided under different plans such as regular payout to specific survivor in the family. The policy expires if any one of the partners expires. If the surviving partner wants further protection, he/she will have to purchase a fresh insurance plan.

A term insurance plan for couples provides cover for the couple as well as equivalent terms and conditions for both, same as it is done in an individual term insurance plan. This will help keep track of the plan, the budget as well as your savings as a couple. Opting for the couple term insurance policy will provide a cover for the husband and the wife. Joint term insurance is highly recommended to couples by experts.

Nuclear double-income families

In a family where both the spouses are working and earning, they can opt for either joint term insurance or a separate cover, whatever they prefer. According to finance experts and researchers, a working couple must purchase term insurance policies that will cover their family as well as their dependant. The sum assured in that term insurance policy should be at least ten times more than their annual income.

Cover for life

It is extremely important for one partner to have a financial cushion for the partner who does not have a very stable source of income. Hence, financially securing the life of your partner will make sure their future is stable, secure, and financially independent, in case of whatever happens that changes thing financially.

Future Requirements

Unexpected expenses can come knocking on your door at any time. It can be anything like a medical emergency, home renovation, etc. That is why it is essential to save enough money so that these financial emergencies can be looked after. This will help your family’s future financial requirements like tuition fees, home renovation fees, etc.

Health concerns

keeping your health in check always is important for you, as well as your family. Regular body check-ups to find out what’s going on with you is important. As the age increases, the health of almost all individuals doesn’t stay the same. It is advised by the experts to opt for an additional rider benefit that will help you deal with all sorts of health emergencies.

Due to the coverage offered by all term insurance plans and their affordability, it has recently gained a lot of popularity among different types of customers who want to make sure their loved ones have a financially secure future. If you are confused about whether you should go for a separate or a joint term insurance policy, you have come to the right place. Read on to find out some of the major differences between separate as well as joint term insurance policies.

Terms and conditions

In case you and your partner choose to purchase separate term insurance policies, the terms, conditions as well as price of the policy will be separate, and you will have to manage both policies separately. In case you buy a joint term insurance policy, you can choose a single plan which will have the same terms, conditions and price. Also, managing a joint term policy will be a lot easier and convenient comparatively.

First Death

A lot of joint term plans calls for payout upon the first claim or first death basis. But some joint term plans also entail payments of sum assured upon the death of each insured partner of the policy.

Single Payout

If you decide to choose a joint term policy, there will be a one-death payment made to the nominees in case the couple dies in an accident. Only one payout will be taking place when the couple dies at the same time in a joint term insurance policy. If the couple decides to choose separate term insurance plans, both partners will get to choose separate nominees. In case of the death of both the partners at the same time due to an accident, the nominees will be receiving two different and separate payouts for both deaths.

Divorce and separation

When a couple separates, or they end up in divorce, joint term insurance cannot be divided then. If one of the partners stops paying the premium, the joint term policy will stop in that case. This is one of the reasons for which the experts recommend choosing separate term insurance policies.

Affordability

As compared to buying two separate term insurance policies, buying a single joint term plan is a lot cheaper and affordable. This is the reason why a joint term policy is so much more preferred and popular in couples than buying two separate policies.

Convenience

The convenience of being able to manage payments, documentations and other things come when a couple chooses to buy joint term insurance. When couples choose separate policies, they will have to follow two separate processes.

• This is one of the most attractive benefits of having a joint term insurance plan. Since you need to pay for a single combined policy than paying for two individual policies, you can better improve on your savings.
• As there is a single policy for a couple, it is easier to keep track of its premium due dates and making timely payments. Anyone of the insured persons can pay for the policy, in due time.
• Few of the joint term insurance plans also offer a specified amount of regular payments to the beneficiary, in addition to an assured sum, if any of the policyholders dies. This can help to replace the monthly income that would have been earned by the spouse if he/she survived. It can be a major advantage for the dependent family.
• With joint term life insurance, you can enjoy double benefits in terms of tax. First, you can claim tax deductions against the premium paid for the policy, under section 80C of the Income Tax Act, 1961. Secondly, the assured sum received upon the death of any of the partners is tax-free as per section 10(10D) of the Income Tax Act.

• A joint term life insurance is suitable for young couples living in a nuclear family with or without kids. Also, if they have home loans or personal loans to repay, it is a better idea to opt for joint life insurance that can protect the survivors from any financial burden, in case of any mishap.
• If you are looking for a cost-effective alternative to cover yourself and your spouse, joint life insurance is a suitable scheme for you, since it offers premium waiver benefits.

There are few things to consider before purchasing a joint life insurance plan:

• The policy expires if any of the joint policyholders die. If the surviving partner wants to continue with the life insurance policy, a fresh policy needs to be purchased.
• Financial planners suggest that joint life insurance is more suitable if both the spouses are earning members of the family since the objective of joint life insurance is to compensate for the income of the partner that passed away.
• The cost savings may not be too huge since the joint premium is lower than individual policies, not by a large amount. Also, the premiums will vary as per individual health conditions and lifestyle of both the partners and income of the primary policyholder. In cases where both the partners are working, the income of the primary policyholder will only be considered to determine the premium amount.
• In a worst-case scenario, if the couple decides to get separated, they will either have to give up the joint life insurance plan or wait for it to lapse. After separation, they may not wish to continue with the plan, and a higher premium can be a burden for them if they wish to wait for the policy to lapse.

If you both are working and living in a nuclear set-up, the joint term life insurance is a great alternative to keep things simple and ensuring a financial cover for your loved ones, in case of mishaps. Make sure you choose a policy with an adequate coverage that suits your and your partner’s lifestyle.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.