Making sure our loved ones have a safe and secure future is very important. One of the best ways to do this is by getting life insurance. Among the different types of life insurance plans, a joint life insurance policy is a smart option because it offers good coverage at a lower cost. In this article, read about what joint life insurance is, how it works, its types, features, benefits, who can apply, the documents needed, and how to apply — all with a focus on the needs of an Indian audience.
What is a joint life insurance?
Joint life insurance is a type of life insurance policy designed to cover two individuals, typically a husband and wife, under a single plan. This type of insurance is particularly popular among married couples as it ensures financial security for both partners. Unlike individual life insurance policies, a joint life insurance policy or joint term life insurance offers combined coverage, making it a cost-effective solution for families.
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How does a joint life insurance plan work?
A joint life insurance plan or joint term life insurance works by providing coverage to both insured parties under one policy. In the event of the death of one insured individual, the policy pays out the sum assured to the surviving partner. There are two primary structures for joint life insurance:
- First death basis: The policy pays out upon the death of the first insured individual. After the payout, the policy terminates.
- Second death basis: The policy pays out only after both insured individuals have passed away. This structure is less common but ensures that the beneficiaries receive the sum assured after both partners' demise.
Types of joint life insurance plans
Following are the different types of joint life policies:
- Joint term insurance plan for husband and wife: This is the most common type of joint life insurance. It provides coverage for a specific term and pays out upon the death of either partner during the policy term.
- Joint whole life insurance: Whole life cover in life insurance policy provides coverage for the entire lifetime of both insured individuals, paying out the sum assured upon the death of the last surviving partner. Read more about policies.
- Joint endowment policy: This policy combines insurance and savings. It pays out a lump sum either on the death of an insured individual within the policy term or upon maturity of the policy.
- Joint Unit-Linked Insurance Plan (ULIP): ULIP offers both insurance coverage and investment opportunities. The premiums are invested in various funds, providing potential returns along with life coverage.
Why should one get a joint life insurance policy?
Following are the reasons why you must consider getting a joint life insurance policy:
- Cost-effective: Joint life insurance policies are generally more affordable than purchasing two separate individual policies.
- Simplified management: Managing one policy instead of two reduces paperwork and administrative hassle.
- Comprehensive coverage: Ensures both partners are covered under a single plan, providing peace of mind.
- Financial security: Provides financial protection to the surviving partner or beneficiaries in the event of death.
- Tax benefits: Premiums paid towards a joint life insurance policy are eligible for tax deductions under Section 80C of the Income Tax Act.
