Joint Life Insurance for Married – Is it a Good Option?

In a traditional life insurance plan, an individual is the owner of the policy, whereas his/her spouse is the beneficiary. But, in recent years, insurance service providers have tried to modify this concept. They have introduced the joint insurance policy in which an individual and his/her spouse are covered under a single policy. In these policies, if one of the partners dies, the other one receives the sum assured. Some popular plans offering joint life insurance are available in the market which includes Bajaj Allianz iSecure More, LIC Jeevan Sathi, PNB Metlife Mera Term, and SBI Life – Smart Humsafar.

Types of Joint Life insurance 

There are two major forms of joint life insurance policies available in the market:-

1. Joint Term Plan

Just like a regular term plan, a particular amount is paid by a couple over a period of time. In case either of the individuals dies, his/her partner gets the cover. As the policy is for a limited period of time, the couple has to renew it after it expires.

2. Joint Endowment Plan

In this type of plan too, the individuals have to pay a certain sum over a period of time. But, unlike the term plan, the couple receives a particular amount from the insurer after the policy expires. This benefit is received even if one of the partners dies before the maturity of the plan.

Why is joint life policy so popular? 

The proliferation of joint life policies has offered couples a new way to secure their lives. A lot of working individuals prefer joint life insurance because the premium usually is lower when compared to two separate policies. Several couples also choose the policies that offer a regular income on a monthly basis to the beneficiary in case of the demise of his/her partner. Several insurers offer this facility for up to 60 months.

Another feature that attracts individuals towards joint life insurance is the waiver of premium in case of death of a spouse or either of the life insured’s. The ability to secure the child’s future is also making it a preferable choice. The child receives a lump sum amount or monthly income in one or both the parents die. Some policies even provide both the benefits in a plan: lump sum money and monthly income.

Several individuals also prefer single insurance over two separate ones because a joint policy decreases the hassles related to the documentation and process of finding a good policy. The availability of Joint Term Insurance Online Plan online has further made the selection and registration process simpler.

Additional Reading:- Do Couples Have To Buy The Same Level Health Plan?

Factors to consider choosing the joint life insurance policy

Though it comes with a lot of benefits, a couple must analyze various factors before choosing a joint policy.

• A joint policy will have the same terms and conditions for a couple. Therefore, they must choose a plan on which both of them have an agreement.

• The age factor matters while purchasing insurance. A joint cover plan becomes cheaper as the age of the couple increases, whereas individual insurance is suitable for a couple in their younger years.

• The couples can also choose a plan that secures the future of their child. A lot of insurers provide policies in which a child also becomes a part of the plan. This means in the case of the death of one or both the parents, the future of the child remains secure.

• If you are single and are about to get married in near future, you can opt for a plan that allows you to add your spouse after marriage during the remaining policy term.

• Some other factors to consider include rebates and bonuses offered by the insurance companies.

Additional Reading:- Why Is Life Insurance Necessary for Life?

When should you avoid joint life insurance? 

It’s not necessary that joint policies are always suitable for married couples. There are some factors and situations during which married individuals can avoid it.

One such situation is that of a divorce/separation. In this situation, the couples either have to wait for a policy to lapse or have to quit the plan. In the case of an endowment policy, the couple will face issues like loss of life cover and lower returns premature liquidation if they plan to separate.

Buying a joint policy is a way risky because maintaining the relationship with anyone and policy both demand efforts and if you are willing to buy a joint policy then you should make certain things clear, and divorce & separation is matter to discuss. After buying a joint policy, divorce or separation can make things odd around you and it’ll affect your joint policy badly.

Being a human we always try to watch “things with reasons” and your divorce is “things with reason”, but the penalty of this mistake is way higher than your stupidity or taking such kind of decision. Divorce is a reason why you may have faced a lot of things and specifically financially.

A joint policy also becomes irrelevant when a surviving individual earns reasonably enough to handle all the household and personal expenses. In this situation, paying a heavy premium on a yearly basis seems irrelevant.

As the premium for most of the policies is less than regular policies, the savings are not sufficient. If one of the partners is suffering from a pre-existing illness or is a smoker, both of them have to pay a higher premium.

Additional Reading:- Step by Step Guide for Buying an Insurance Policy in India

Conclusion

All the benefits and factors discussed above show that joint life insurance is ideal in most situations. In case you feel joint life insurance does not make sense due to one of the factors discussed above, you can divide your insurance requirements by selecting multiple plans at different stages of life. This may require you to take the support of a financial planner or a policy comparison but will prove beneficial in long term.