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LIFE INSURANCE

Joint Life Insurance: Covering Two Lives in One Life Insurance Policy

Janhavi Shinde Janhavi Shinde 03 April 2019

A number of life insurance companies have started introducing joint life insurance for married couples. The main advantage - you get covered for two lives under a single contract at affordable premiums!

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Planning to tie the knot? Well, that's big news.

Every soon-to-be married couple is advised about the many responsibilities they will need to shoulder after taking the plunge. There is now going to be another life you need to think about. As a married man or woman, part of your duty will include ensuring that your partner is protected from any eventuality in life. And, what better way to do so than with a life insurance cover. This product is designed to provide financial security to your loved ones in case something untoward happens to you.

Recognizing the need to have financial security in place for married couples, insurance companies have devised joint life insurance plans. As its name would suggest, a joint life insurance policy allows you to cover both your spouse and you under one contract. It helps secure the future of your family, if either of you is not there. A joint life insurance plan gives due recognition to the fact that the life of your partner is equally important.

Your Guide to Joint Life Insurance- All of the joint life policies available in the market do not function in the same manner. Some of them pay out on first-claim basis. This means the sum assured will be paid when the first person dies (during the length of the policy). Then there is another variant where payment will be made only after both the partners pass away. The primary purpose of this kind of life insurance policy is to protect the beneficiaries you leave behind, like children.

Some policies also provide additional benefits. If either one of the partners passes away, a regular income is provided to the surviving member for a fixed duration. This income can be in addition to the death benefit paid to the surviving partner. Under some policies, an extra amount is paid with the death benefit in case the demise is the result of an accident. Some of the plans in the market give the option of adding a critical illness insurance rider to the base life insurance policy. A few of the recently launched ones come with in-built accidental death benefit and in-built terminal illness benefit.

Types of Joint Life Insurance

Similar to individual life insurance plans, there are options in the joint life insurance category as well. A joint life policy can be availed as an endowment plan or a term plan.

Joint Term Plan: Like a regular life insurance, premium will need to be paid for a fixed duration. A claim can be made in the event either one of you passes away during the policy period. However, the cover will expire once this happens. Following this, you or your partner will need to buy another life insurance plan at a revised premium rate.

Joint Endowment Plan: An endowment plan has an investment angle to it. Similar to a term plan, it is valid for a particular period - generally till the time you retire. Once the policy period is complete, the insurance company will pay a certain amount. A joint endowment plan promises you and your spouse an assured payment once the policy expires. This holds true even if one of you passes away. If you lose your partner, you will receive a certain sum of benefit and continue to be covered until the policy reaches maturity. When this happens, you will receive the endowment money. The premium payments usually do not have to be made after the first death.

Joint Life Insurance versus Separate Plans

Couples seeking life insurance have two options - a joint life policy or two separate policies for self and spouse. Both the options vary drastically with regards to their features. To find out which mode is the most suitable option, it is essential to be thorough with their functions. Following are some of the key areas of differences between joint life insurance and individual insurance policies:

  • A joint life insurance will cover both the partners on the same terms and conditions. In case separate policies are availed, the policy terms and premiums can be chosen by each spouse, on the basis of his or her individual requirements.
  • Many joint life policies usually only pay out on the demise of one member. So, if a single death pay-out policy has been availed and if both the partners pass away in an accident, the beneficiary will only receive a single death-related payment. But, if the same couple had opted for individual policies, then two separate death-related pay-outs would have been made to the beneficiary.
  • Individual life insurance policies generally cost more than joint life covers. The reason why the latter is more affordable is because it is cheaper for an insurance company to underwrite two individuals at the same time. The difference, however, in the pricing would not be drastic. It is worth comparing the prices of both options.

As you can see from the above-mentioned points, there are pros and cons to choosing the joint policy route to meet your insurance needs. Evaluate your particular circumstances and accordingly decide whether you want to opt for this plan or two separate life insurance policies. Financial experts generally recommend joint life policies to young couples who are at the peak of health. If either you or your partner suffer from any particular ailment, you can consider availing two separate plans. This way, you’ll save on the premiums.

Recommended Read: Types of Life Insurance

Janhavi Shinde
Written by Janhavi Shinde
Right from being a Flight Attendant to a Banker and now to a Content Writer, she has tasted success in all the fields. The kinda girl who loves pets and knows how to manage difficult people and events.