One of the most important insurance coverages to be taken by salaried and self-employed people is the term insurance plan because it protects your goals even if you are not there.
A regular term insurance policy is simple. You pay a fixed premium over a period of time, usually throughout your working life or until all your goals are achieved. If you survive the premium payment period, you receive nothing. But if something unfortunate happens to you, your nominee would receive the sum assured.
A variation, and a slightly more comprehensive version of the regular term insurance policy, is the joint term plan or a spousal term plan.
You can also cover your spouse who works or stays at home with the joint term plan, with a variable or shared sum assured. And there are a few sub-options with this coverage as well.
Read on to learn more about joint term insurance coverage and whether you should opt for one.
Spread the blanket
As mentioned earlier, joint term life insurance covers both husband and wife within one policy. From now on, the main policyholder should be an employed member. The other holder can be an active person or a housewife.
The insurance company decides to issue the policy based primarily on the merits (age, income, lifestyle, health, etc.) of the first or primary policyholder.
There are two variations of the joint term plan. The first is where the sum insured is different for the two spouses.
Usually, the primary policyholder would be allowed to purchase a policy with a higher sum assured. The secondary policyholder would be entitled to coverage of the same amount, either 50 percent or 25 percent of the sum assured of the primary policyholder.
For example, if the primary policyholder takes out a policy for ₹1 crore, the other policyholder would be eligible for coverage of ₹1 crore or ₹50 lakh or ₹25 lakh.
Let’s say we have a policy of ₹1 crore for the primary policyholder and ₹50 lakh for the secondary policyholder, valid for a period of 35 years. If the primary policyholder died in the twentieth year, the secondary policyholder would receive ₹1 crore and the policy would continue to operate until the end of the 35-year period. If the secondary policyholder survives the policy period, nothing further will be payable and the policy will terminate. However, if, say, the secondary policyholder dies, say, during the thirtieth year of the policy, the applicant would receive ₹50 lakh.
There is then the possibility of sharing the sum insured in the joint temporary insurance contract. In this plan, both policyholders are treated the same.
Let’s say a joint term insurance policy of ₹2 crore is taken by a husband and wife for a period of 40 years. If both survive the 40-year premium payment period, there will be nothing to pay and the policy will be closed. However, if one of them dies, say, in the tenth year of the policy, the other holder would receive ₹2 crore and the policy would no longer exist after payment. In the event of the death of both, the sum insured is paid to the candidate.
Should we go there?
Many insurers, such as PNB Metlife, Aditya Birla Sun Life Insurance, Bajaj Allianz Life, Edelweiss Tokio and ICICI Prudential Life offer such joint life insurance policies.
In terms of premiums paid, the rate would likely be a few hundred or more cheaper compared to purchasing separate term policies.
But there are specific cases where purchasing joint coverage would be helpful.
For example, if both spouses are almost the same age, work in the same industry and share a similar lifestyle, then a joint policy with a large sum assured would be helpful, and maintaining the policy would be simpler since only one cover must be ensured. To be taken. Additionally, a significant reduction in premiums could be possible.
Another key aspect in which joint term life insurance is useful is in covering stay-at-home spouses or even those who have had to leave work to raise children, take care of family affairs, etc., who otherwise would have been a challenge.
A key aspect of joint term insurance is that if one of the insureds dies, the policy continues to be insured. Some insurers even offer a premium waiver option at this stage.
For spouses with a considerable age difference, completely different work cultures and lifestyles, it may be best to opt for separate term insurance policies.
