What is a joint life insurance policy?
A joint life insurance policy includes both partners as policyholders and provides financial protection for both of them. In an unpredictable future, it is critical to ensure your spouse's financial security. Joint life insurance is an excellent approach to combining the values of both couples under one umbrella. Furthermore, a joint term policy provides greater financial stability for your children. Here's everything you need to know about joint-term life insurance.
Features of Joint life insurance
Unlike term insurance for a housewife or for the husband individually, a joint life policy is a single plan that covers both the woman and the husband, regardless of whether they work together or separately. In this way, the family covers the homemaker's human life value. For example, if a couple has joint life insurance and the husband is the first to die, the wife will receive a support payment under the joint life policy.
Whereas a single life policy would have expired, joint life insurance will cover the other spouse until the policy expires. The insurance gives financial support to the remaining partner, independent of their employment position.
As a result, even if the surviving partner dies unexpectedly, the children will have appropriate financial assistance. They can live their lives and achieve their future ambitions with the same financial assistance as if they had both parents.
How Does Joint Life Policy Work?
When you get a combined life insurance policy, your spouse is insured under the same plan. Single-life plans such as term insurance for housewife cover only the wife under one policy. Joint life insurance is an excellent option to care for your partner after your death.
If you are planning to buy term insurance, it is recommended to read about the joint term plan as it gives an assured sum to the living partner following the death of the other. The homemaker spouse will be covered for up to 50% of the working spouse's sum assured amount.
If you purchase a joint life insurance policy, your spouse will get the death benefit sum assured on your life just like term insurance for housewife. You can choose the method of disbursing the death benefit as follows: Lump lump amount, Regular monthly income
A joint life insurance plan operates on a first-death basis. If one of the partners dies unexpectedly, the other person's life insurance coverage continues after the deceased spouse's death benefit is paid. This applies regardless of whether the surviving spouse works or not.
The living partner receives only the sum assured and the spouse cannot claim any additional benefits.
A joint life insurance plan provides life insurance coverage to the homemaker. The homemaker spouse is eligible for a life insurance policy equal to 50% of the sum assured for the breadwinner spouse. In the event of both partners' death in a joint life policy, the legal heir will get the death benefits for both partners' life insurance.
Joint life insurance policy covers the surviving spouse regardless of employment status. If the policy includes a premium waiver option, the surviving spouse's life coverage will continue without them paying the extra premium payments.
In the unfortunate event that both partners are unable to survive the unfortunate situation, the insurance money is credited to the policy's beneficiaries or designated legal heir.
Types of Joint Life Policies
You can choose between two joint life policy options Depending on your circumstances, you may decide to purchase one of them.
1. Joint Term Insurance Plan: This is the long-term life plan that you and your partner can follow together. If the other person dies unexpectedly, either of you may claim this amount. This policy requires you to pay a premium over a set period. Joint-term life insurance terminates following the death of both policyholders or at the end of the policy term, whichever occurs first.
Joint life-term insurance provides enough financial security for the family.
If you are planning to buy term insurance, you can also opt for joint life term insurance as its premium is also one of the lowest among other life insurance options. If both spouses are employed, benefits such as accidental disability and critical illness coverage can be added.
2. Joint Endowment Plan: A combined life endowment plan requires both policyholders to pay a fixed premium for a set period. However, once the policy expires, both partners will receive the guaranteed benefit amount. The joint endowment life insurance policy functions similarly to an endowment plan. However, this plan includes both partners. If you purchase a joint life endowment plan, the death benefit is paid to the surviving partner after one of the partners unfortunately dies. However, the policy with life coverage for the surviving partner will continue until:
The partner died within the remaining policy time.
The policy expires.
Your spouse will get the insured funds after the plan matures.
If you chose a premium protection benefit in your joint life endowment plan, death benefit payments will have no effect on the maturity value. Following the death of a policyholder, no premium payments for the surviving spouse's life insurance are due.
3. Joint Whole Life Insurance: Joint whole life insurance works similarly to a joint endowment policy. However, the coverage in this plan continues until the surviving spouse reaches the age of 99 (or 100). Joint whole life insurance is an excellent option to leave a legacy for your legal heirs, as the coverage will continue until your natural death. The insurance provides a death payout in the event of either partner's death and can also be used as a retirement asset with cash value.
Why Should You Buy Joint Life Insurance?
If one plans to buy term insurance, one can take a look at the benefits of buying a joint life insurance plan. Some of the most crucial reasons to purchase combined life insurance are stated below.
1. Low-cost premium: If you purchase a joint life policy, your premiums will be significantly lower. These are frequently considered economic policies. Just like you buy term insurance, similarly you can purchase joint life insurance without having to deal with financial troubles when paying the payment.
2. Simpler Life Coverage Management: A combined life policy is a single policy that covers both spouses and is mostly preferred if you do not just want to have term insurance for housewife. If you both earn and contribute to the policy, you are both eligible to enjoy the associated tax benefits. However, neither of you will need to file separate paperwork for it.
In addition, if one of the couples dies unexpectedly, the policy will continue to provide life insurance to the surviving spouse without paying further premiums. This is especially beneficial to the homemaker spouse.
3. Cover the Homemaker Spouse: Non-earning members are typically not eligible for term life insurance coverage and that is why they buy term insurance for housewife. This type of policy has its own benefits but if one is looking for joint coverage, a homemaker spouse can obtain life insurance through a joint policy with his or her working husband.
Who can buy joint life insurance?
If you are married, you can purchase a joint life cover. These policies forgo any further premiums if one of the policyholders dies unexpectedly. The other person is entitled to complete the policy term with their portion of the life insurance.
However, this insurance coverage is also ideal for business partners. You can purchase joint life insurance with your business partner to protect the company's interests. In the event that one of the company partners dies unexpectedly, the other will receive a fund that can be used to settle the dead partner's succession plan.
If you and your partner are concerned about your child's financial security after your death, you can purchase joint whole-life insurance to ensure that they are financially secured. This money will undoubtedly help the youngster with future needs such as college fees, house maintenance, healthcare, and much more.
