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Joint Life Policy In India

Many people buy life insurance as part of their financial planning. Ideally, life insurance is taken by the income earners of the family to ensure that the dependents are financially secure in their absence. Nowadays, modern families consist of both partners doing a full-time job. In such a situation, it becomes necessary to have life insurance covering both the parties.

Considering this, insurers now offer joint life insurance plans that provide coverage to both the partners under a single plan. Let us discuss this further in detail.

What is a Joint Life Insurance Policy?

A joint life insurance plan is an insurance policy that offers coverage to the spouse of the primary policyholder. The coverage is extended to the partner irrespective of their employment status. Here’s why you should buy a joint life insurance policy.

  • Many joint life insurance plans available in the market offer coverage of up to 50 per cent of the sum assured amount for the policyholder’s spouse.

  • The policy is active even after the death of either of the spouses. In that case, the sum assured is given to the surviving partner as per the policy norms.

  • If both happen to die in an unfortunate event, the sum assured is given to the beneficiaries of the policy or the legal heir.

  • In case the spouse is unemployed, the combined sum assured amount for joint life insurance cannot exceed the maximum sum assured amount applicable to the primary insured.

  • A few joint life insurance plans offer waiver of premium benefits in case of the death of the primary insured.

  • Some joint life insurance plans offer fixed monthly payments to the spouse in case of the death of the primary insured.

Features & Benefits of Joint Life Insurance

Features of Joint Life Insurance Plan

Here are some salient features of joint life insurance plans in India.

●     During unfortunate scenarios, if one of the spouses dies, the surviving partner receives the death benefit.

●     If both spouses die in an unfortunate event, then their legal heir will receive the death benefit.

●     Some insurers allow you to raise separate claim requests upon the death of each of the partners.

●     The surviving partner can opt to receive the death benefit as a lump sum amount or regular monthly income, as suitable to them.

●     The policy provides tax benefits on the premiums paid.

Benefits of Joint Life Insurance Plan

The following are the advantages of joint life insurance plans.

●     Since joint life insurance involves paperwork for only one plan, both the parties can manage the policy conveniently.

●     With joint life insurance, you have to pay only a single premium. This means it requires only a single payment to cover both the spouses.

●     The premiums for joint life insurance are lower compared to individual life insurance plans. In fact, joint life insurance is a lucrative option for couples who are on a tight monthly budget with limited resources to invest.

How Does Joint Life Insurance Policy Work?

Ideally, joint life insurance plans are offered to provide coverage to the non-earning spouse. In case both the partners are doing a full-time job, it is advisable to have two separate term insurance plans covering each individual.

When it comes to a joint life insurance plan, the benefit is provided to the surviving partner to help take care of the family. Know that you will have to pay additional premiums to get coverage for your spouse under the same plan. To understand the working of a joint life insurance plan, consider the following example.

Let us assume that Mr. and Mrs. Sharma bought a joint life insurance plan. Mr. Sharma being the sole earner in the family and has opted for a sum assured of Rs. 50 Lakh. In this case, Mrs. Sharma is eligible for a sum assured of INR 25 lakh. Now, if Mr. Sharma dies during the policy tenure, Mrs. Sharma is eligible to receive INR 50 lakh from the insurer. However, if Mrs. Sharma dies during the term, Mr. Sharma will receive INR 25 lakh from the insurer.

When it comes to single payout plans, the policy will be terminated after receiving the death benefits for either of the spouses for whom the policy is bought. If both happen to die at the same time, the beneficiaries of the plan will receive the said benefits.

Types of Joint Life Insurance Plans

Much like any other life insurance plan, the joint life insurance policy has two categories –

1. Joint Term Plan

In joint term plans, you (the primary policyholder) pays the premium for a specific term. In case of yours or your partner’s unfortunate death during the policy duration, the insurer will pay a lump sum amount to the surviving partner. In case both parties die, the benefit goes to the legal heir or their children. However, if you both survive the policy term, no benefits will be provided.

2. Joint Endowment Plan

Joint endowment plan comes with an investment component to it. Much like a joint term plan, it is valid for a specific period (usually until your retirement). However, if you both survive the policy term, you and your partner receive a certain amount from the insurer, known as endowment. This stands true even if any one of the partners dies unfortunately during the policy duration. However, if that happens, the surviving partner receives the life cover benefit as well as endowment money.

Difference Between Joint Life Insurance and Separate Life Covers

Consider the following table to understand the difference between joint life insurance and separate life covers.

Joint Life Insurance Plans

Separate Life Insurance Plans

The policy offers life cover to a couple (two people).

The policy offers life cover to individual people.

Same terms and conditions are applicable to both the partners.

Individuals can choose policies based on their personal requirements.

In case of the death of either of the spouses, the surviving partner receives the death benefits.

The beneficiaries of the policies will receive the death benefits upon the death of the insured.

If both happen to die at the same time, the beneficiaries of the plan will receive the death benefits.

If both happen to die, the beneficiaries will receive the death benefits from each individual policy.

In the event of separation or divorce of the couple, the policy will be affected as there are no provisions stating how the premiums and benefits will be split between the two parties.

In the event of separation or divorce of the couple, the policy is not affected as both parties hold individual life insurance plans under their respective names.

Not many insurers provide add-on covers along with a primary joint life insurance plan.

You can choose a rider as per your requirements and affordability.

 

What are the Benefits of Joint Life Insurance Plans?


The following are the advantages of joint life insurance plans.

  • Since joint life insurance involves paperwork for only one plan, both the parties can manage the policy conveniently.

  • With joint life insurance, you have to pay only a single premium. This means it requires only a single payment to cover both the spouses.

  • The premiums for joint life insurance are lower compared to individual life insurance plans. In fact, joint life insurance is a lucrative option for couples who are on a tight monthly budget with limited resources to invest.

Features of Joint Life Insurance

Here are some salient features of joint life insurance plans in India.

  • During unfortunate scenarios, if one of the spouses dies, the surviving partner receives the death benefit.
  • If both spouses die in an unfortunate event, then their legal heir will receive the death benefit.
  • Some insurers allow you to raise separate claim requests upon the death of each of the partners.
  • The surviving partner can opt to receive the death benefit as a lump sum amount or regular monthly income, as suitable to them.
  • The policy provides tax benefits on the premiums paid.

Who Should Buy Joint Life Insurance?

Ideally, people with a financially dependent spouse/partner should consider buying a joint life insurance plan. It is a cost-effective financial tool, as the primary policyholder has to pay single premiums towards the policy. Moreover, insurers in India provide competitive and affordable premium rates with a wide range of benefits.

To Sum It Up!

Each life insurance option has its own set of benefits. The joint life insurance plans are an attractive deal as it provides life cover to the non-earning partner. However, the benefits offered under the policy differ from insurer to insurer. Compare different aspects of various joint life insurance plans in the market, and then choose a plan that best suits your needs. Determining the tenure of your term plan is as essential as calculating the premiums you pay. You can check our term insurance calculator to compute your premium amount. It is ideal to choose a longer tenure when it comes to keeping up with the financial needs of the future and stay covered in times when your loved ones need financial security.

FAQs

  • ✔️Which is the best joint life insurance plan in India?

    The ideal joint life insurance plan depends on several factors - your affordability, coverage preference, and age. You also have to evaluate your and your partner’s financial needs before buying a joint life insurance plan.

  • ✔️What happens to joint life insurance plans after a divorce?

    The partners can either continue the policy on mutual agreements or cancel the plan altogether. On the other hand, you can request your insurer to convert joint life insurance policy to individual plans that suit your needs.

  • ✔️When should you consider buying a joint life insurance plan?

    Joint life insurance is preferred by people whose spouses are financially reliable. That way, if anything were to happen to the policyholder, the dependents are financially secured.

  • ✔️Can I buy term insurance on Finserv MARKETS online?

    Yes. You can buy term insurance plans at Finserv MARKETS by following the steps below:

    1. Go to the ‘Term Insurance’ section on Finserv MARKETS website.
    2. Fill out the application form with relevant information.
    3. Upload the supporting documents.
    4. Submit the application to the insurer for assessment.
    5. Once the insurer assesses and approves your application, proceed to pay the premium online.
    6. Upon successful premium payment, the term insurance plan will be issued shortly.
  • ✔️Are there any tax benefits on buying life insurance in India?

    Yes. The premiums paid towards your life insurance policy can be claimed for deductions under Section 80C of the old income tax structure. Further, the benefits paid to you and your dependents are tax-free under Section 10(10D) of the Income Tax Act, 1961.

  • ✔️Are there any tax benefits under Section 80D in life insurance?

    If you buy term insurance with critical illness cover, you can claim additional deductions under Section 80D of the Income Tax Act, 1961.

  • ✔️What are the benefits of buying term insurance?

    The advantages of buying term insurance plan are as follows -

    ●     It is the most affordable life insurance plan in India

    ●     It offers financial security to your loved ones after your death

    ●     You can enhance the coverage of the policy with rider benefits

    ●     It offers several tax benefits

  • ✔️Is there any way to determine the term insurance policy cost before buying the plan?

    Yes. You can use the term insurance calculator to determine the cost of your term insurance plan based on your desired coverage and add-on benefits.

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