What is Joint Life Insurance? What are the Benefits of Purchasing It?
Updated On Aug 03, 2021
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Innovative modifications are a result of modern times and changing gender norms. A joint life insurance policy is an example of an ingenious plan designed to fit the changing society where both spouses work and manage their families. Let's look at some of the features of a joint life term insurance policy.
What are Joint Life Term Insurance Plans?
In a joint life term insurance policy, both spouses, business partners, or even parents with a kid are covered under one policy. This ensures that the surviving policyholder has financial stability in the case of an emergency. Furthermore, joint life term insurance coverage is less expensive than separate policies.
How Does Joint Life Insurance Policies Work?
To guarantee the validity and continuing coverage of a joint life term insurance plan, the partners pay the premium for the stipulated duration. If one of the partners dies during the policy's term, the surviving partner will get the death benefits. Furthermore, if both spouses die before the policy is completed, the beneficiary is eligible to receive the death payments. However, the policy would then expire, and the surviving policyholder would have to purchase a new plan.
What are the Benefits of Joint Life Insurance Policies?
The following is a list of the advantages of a joint term insurance policy.
The joint term life insurance plan eliminates the financial strain of paying separate premiums on individual term insurance plans. A joint life term insurance policy also provides more coverage than a standalone term life insurance policy.
2. Income Replacement
If the partner dies before the policy is completed, the surviving life assured receives monthly death benefit payments. This serves as a source of income for the surviving life assured and assists in covering the family's day-to-day expenses and lifestyle.
3. Tax Benefits
The life assured who pays the premiums under joint life term insurance plans will receive various tax benefits under Section 80C of the Income Tax Act. In a year, they can save up to Rs. 1.5 Lakhs.
4. Waiver of Premium
If the other policyholder dies, the surviving life assured receives a waiver on future premium instalments.
How are Joint Life Insurance Plans Different From Regular Term Plans?
The number of policyholders is one of the main differences between a joint life term insurance plan and a standard term insurance plan. The joint-life term insurance plan can give life coverage to two people on the same policy terms and conditions, as opposed to the ordinary term insurance plan, which only covers one person under one plan. Money on individual policy premium payments is saved as a result of this. If the other policyholder dies, the death benefit is paid to the remaining life assured. In contrast, in the case of a conventional term insurance policy, the sum is paid to the beneficiary or nominee after the policyholder's death. Only when both joint life term insurance policyholders die within the policy term is the recipient compensated.
For spouses and partners who don't have the financial means to purchase individual policies, a joint life term insurance plan can be extremely useful. Furthermore, the plan's cost-effectiveness and tax benefits make it an attractive proposition. So, before deciding on a plan for yourself and your partner, it's a good idea to look through the terms and conditions of the many plan alternatives offered by various insurers.
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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.