As more and more women join the workforce and become financially independent, a joint term insurance plan has been introduced by several insurers of the country.
A term insurance plan is the simplest and basic form of life insurance that offers coverage, purely for the risk of life. If the life insured in a term insurance plan dies within the policy term, the predetermined sum assured is paid to the beneficiary as a death benefit.
A joint term insurance plan offers coverage to a couple through a single plan. If either of the spouses dies, the sum assured is paid to the surviving spouse by the insurer.
The entire process can be accomplished in a few defined steps by invoking the “Buy Online” or “Buy Now” Tab in the portal. The involved steps are:
The payout options available under a joint term plan can be any among the following. On the death of any one of the policyholders, the sum assured is paid to the surviving partner as per the selected payout option.
The main differences between a joint life term insurance plan and an individual term plan are:
Parameter | Joint Life Term Insurance Plan | Individual Term Insurance Plan |
Coverage | Covers both partners in a single plan | Both partners take separate individual term plans |
Sum Assured | The combined sum assured in a joint-term plan depends on the policyholders' annual income since both partners are offered coverage on the same parameters. |
The policyholder's income is taken into consideration while deciding the sum Assured |
Death of one insured partner |
The payout to the surviving member is done based on the plan selected. The policy continuity also depends on the plan type selected by the policyholders. |
On the death of the policyholder, the policy terminates, and the entire sum assured is paid to the nominee. The other surviving partner remains insured as the coverage is through a separate policy. |
Death of both insured partners | In the case of the death of both the policyholders, the sum assured is paid to the legal heir mentioned in the joint-life term insurance plan. | In an individual term insurance policy, both partners have separate insurance policies. In case of the death of both the partners, the sum assured is paid as per the nominee/ heir details mentioned in both the plans exclusively. |
Divorce | In the event of a divorce, the insurer can confirm if there is an option to split the policy and let it continue. | In the case of individual term plans, a divorce of the partners does not affect the working of the policy. If, however, the partners have named each other as their nominee, the nominee details would have to be changed. |
A joint life term insurance policy is suitable in the following cases: