Families with only one earning member have fast become a thing of the past. People these days understand the need for both individuals to earn for comfortable financial sustainability of a family. Life insurance companies have taken this change into account as well and that’s why they have introduced joint life insurance policies.
What is life insurance and what is a joint life insurance policy?
Life insurance is an insurance policy that gives out financial compensation to the beneficiary of the policyholder in case the policyholder passes away. This helps you protect your family financially if something unfortunate happens to you.
Traditionally, insurance policies cover only a single person. That means, everyone would need separate insurance policies. But insurers realised that it would be more convenient and useful if people, especially couples, could enjoy benefits through one single policy and hence, they introduced joint insurance.
There are two different types of joint insurances mainly, they are
Joint term life insurance
In a joint term plan, both of you are insured for a specific period of time with a specific predefined sum insured. Term plans offer higher coverage with lesser premiums. There is no investment element in term insurance and no amount will be refunded once the policy matures. Also, if one person passes away, the other person can claim the benefits, but insurance will become void, and they will have to buy another insurance for their protection.
Joint endowment plans
Unlike a term plan, joint endowment plans have an investment element to it. Once the policy matures, which is usually when you retire, you will get the maturity monetary benefits. In a joint endowment plan, if you, unfortunately, lose your partner, you will receive financial aid and your insurance policy will also remain valid for you until the time of maturity. In most cases, you will need not make payments too after your partner’s demise.
Premiums in a joint insurance
In a joint life insurance plan, the premiums are normally more than one single policy because the coverage is for two people. At the same time, it tends to cost less than two separate policies. Your premiums also depend on the type of joint life insurance you have chosen. If you have term insurance, the premiums will be lower with no investment benefits and endowment plans have comparatively higher premiums and an added investment element.
Beneficiary in a joint life insurance
In most joint life insurance plans, if one partner, unfortunately, passes away during the course of the plan, the surviving partner will get the insurance amount. This amount could be paid as a lump sum and some insurance providers will allow you to convert it into monthly payments as well.
If in an unfortunate occurrence both parties pass away together, their heir or the specified nominee would get the insurance amount.
If both parties survive the term of joint life insurance, monetary benefits will be paid at the time of maturity.
How to buy a joint life insurance plan?
Purchasing a life insurance plan is easy and hassle-free, doesn’t matter whether it’s a joint plan or not.
Most insurance provider websites and apps now have options that will let you choose exactly the plan you want. You could use its resources to understand more about the plan and use tools like a life insurance calculator to help you crack its math.
The only difference when it comes to joint life insurance is that you will need to do the documentation and KYC for both parties. Your insurer would also need medical checkups for both you and your partner as well.
If you don’t have a life insurance policy, joint or not, it is a wise idea to buy one as soon as you can, especially when online life insurance plans can be bought in a matter of a few clicks. Get insured today and make sure your family is well protected!
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