Life Insurance occupies a niche status as a component of financial planning because it caters to the specific needs of an individual with diverse goals and objectives. The multiplicity of plans and customization enables the insured to secure the family's financial future, safeguarding them from the sudden blow that the breadwinner's death entails.
Concepts are changing from the traditional perception of insuring only the primary breadwinner, with the women contributing to the household economic sphere substantially. In case both partners are working, the household economic burden is shared. Even for a homemaker, the value of her contribution in economic terms is significant.
Considering the emerging scenario Joint Life Insurance is a necessity, providing life risk cover to both the partners in a single policy.
A single life insurance policy covering both partners in a combined premium is Joint Life Insurance. The policy functions like any other life insurance plan, other than the fact that two lives are covered. Here a nominee is redundant as both the partners are owners, as well as beneficiaries. The spirit behind Joint Life Insurance is that both the partners are equally important. However, it operates on the principle of the first-death basis. If either of the partners meets with premature death, the death benefit claim is settled in favour of the surviving partner.
The concept of life insurance does not restrict the choice to the prospective policyholder as is a general perception since the only difference is that the plan covers two lives instead of one.
It is a pure risk life insurance policy primarily meant for future financial protection. On the demise of any one of the insured, the death benefit is paid to the surviving partner, and the cover expires.
By nature, such plans include savings element, and the money grows over time. There are both death and maturity benefit components in the plan. The plan promises to pay assured sum to the policyholders on the expiry of the policy term, even if one of the partners passes away. On the demise of either partner, death benefit cover is paid, and the policy continues till the end of the policy term culminating in payment of promised maturity .benefit. However, the premium is waived after the first death.
Though the concept is evolving, there are several Joint Life Insurance Plans in the market. Choosing the best among them is a difficult task. However, considering the options and variety in them, the following can be deemed to be the best Joint Life Insurance Plans at present.
There are primarily two modes to apply for Joint Life Insurance. They are Offline and Online broadly. In the offline mode, the assistance of intermediaries is called for. The process is manual right from initiation, completion of the proposal form to payment of premium through cash, cheque, or DD.
In the Online mode, the option in the portal asks for necessary details like age, gender, smoking habit, sum assured, policy term, premium payment frequency for the chosen plan. The premium is calculated and communicated. Once the quote is accepted, the premium is paid digitally. Finally, the proposal form is completed, and the application is processed. The standard set of required documents for application is as follows:
Among the plan-specific features, the uniform tax savings apply to all life insurance plans. As per the Income Tax Act, 1961 premium is deductible up to a maximum Rs 1.5 Lakh.
It is a level term plan for low cost and high sum assured. Joint life cover can be included subsequently.
It is a pure protection plan offering four options. With joint life cover, there is an option to enhance cover sum at different life stages.
It is a term plan with options of "Better Half Benefit," which ensures enhanced life cover even in the absence of the primary breadwinner. Other options are life stage benefit and waiver of premium.
It is a pure risk protection plan with 8 options. The key highlights of the plan are cover for a spouse, life stage benefit, terminal illness benefit, the return of premium, and multiple payout choice as per the policyholder's convenience.
It is an endowment Joint Life Insurance plan with options for additional riders. Premium is waived on the demise of any of the joint holders of the policy. The maturity benefit in case both the holders survive the policy term, comprises of the total of the base sum assured, vested reversionary, and terminal bonus.
The comparison is confined to only basic parameters. It is for the applicant to check up the individual plan brochure for greater insight into them.
Comparison of 5 best Joint Life Insurance
|Insurance Plan||Entry Age||Maturity Age||Policy Term||Sum assured|
|Bajaj Allianz iSecure Insurance Plan||18 - 60 years||28 - 70 years||10 - 30 years||Rs 2.5 Lakh-Rs 20 Lakh|
|PNB Metlife Mera Term Plan||18 - 65 years||99 years||10 - 81 years||Rs 10 Lakh- Rs 5 Crore|
|Edelweiss Tokio Zindagi+||18 - 65 years||80 years||62 years||10 X AP|
|ABSLI LifeShield Plan||18 - 65 years||80 years||50 years max||Rs 25 Lakh- unlimited|
|SBI Life Humsafar||18 - 46 years||65 years||10 - 30 years||Rs 1 Lakh - Rs 5 Lakh|
Sharing a life risk cover through Joint Life Insurance is a good option for married couples. While buying a suitable plan for meeting the joint needs, it is prudent to consider the following:
Where both are working, it is sensible to buy a Joint Term Plan with sum assured is 10 times the joint annual income.
It is ideal to opt for a long policy term, preferably whole life.
It is imperative to factor in future requirements, like education of children, purchase of a house, children's marriage, etc.
It is of utmost importance, as with growing age, this will surely impact the finances of the family.
Considering all the above, the sum assured should be able to absorb not only the emotional shock but also sustain a comfortable lifestyle.
Judicious evaluation of the income profile of the married couple helps in servicing the Joint Life Insurance until the policy paying term comfortably.