Joint Life Insurance Policy
Joint Life Insurance Policy provides insurance coverage to 2 people. The premium for a joint life term insurance policy is paid jointly by both the life assured for a specified period. In this insurance policy, the payment is made on the basis of the first death of either of the two. If one of the two policyholders dies, the sum assured is paid to the other policyholder.
However, on the death of either of the two life assured, the policy comes to an end. If the surviving policyholder wants to take advantage of the life insurance policy coverage in future, then he will have to buy a new life insurance policy. In a Joint Life Insurance Policy, both the policy holders are its owners and both are its beneficiaries.
Types Of Joint Life Insurance
Now we will discuss about the types of Joint Life Insurance Policy. There are two types of joint term insurance plans, joint life term plans and joint endowment plans, which are discussed below-
- Joint Life Term Plan :
A joint term life plan has all the features of a life term plan. The only difference is that instead of one person, two people are covered. The same premium is paid by both the policies till the specified term of the policy. If either of the two policyholders dies during the policy term, the death benefit is provided to the surviving policyholder. Joint life policy coverage ceases after the death of either of the two policyholders. Now if the surviving policyholder requires further coverage, he/she needs to buy a new life insurance policy.
- Joint Endowment Plan :
Joint Endowment Plan provides a policyholder with insurance cover as well as investment facility. This plan is for a fixed period in which after the end of the policy term the insurance company pays a fixed amount to the policyholder which is called endowment. This plan pays a fixed endowment amount to both the policyholders at the end of the policy term. In case of death of either of the two policyholders, the endowment amount is paid to the surviving policyholder. However, if one of the policyholders dies, the premium payment is stopped and the benefit is passed on to the surviving policyholders.
Benefits Of Joint Life Insurance Plans
We will now discuss about the benefits of joint life insurance plans. Let us see what are the factors that make joint life insurance plans an attractive option. So let us discuss in detail about the benefits of Joint Life Insurance Policy.
- Low Premium :
Joint life insurance plans are available to you at low and affordable premiums. This is because in joint life insurance 2 people together pay the premium which is less as compared to single life insurance policy.
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- Supplementary Income:
Some joint life insurance policies also provide the benefit of a regular income to the policyholder. When either of the two policyholders dies, the surviving policyholder is provided with a regular income for a few months in addition to the death benefit. This additional income provides financial security to the family.
- Financial Security :
Joint life insurance policy can be a beneficial insurance policy for young couples. With this you can further strengthen the financial security of your family. In case of any unfortunate event of death of one of the spouses, other liabilities and financial obligations of the family can be easily met through this plan.
- Income Tax Benefit :
Joint life insurance policy also provides you income tax benefits. Through this life insurance policy you become eligible for tax deduction on the premium paid under Section 80C of the Income Tax Act 1961. Apart from this, the death benefit received by the beneficiary under Section 10(10D) of the Income Tax Act is also tax free.
Who Should Buy Joint Life Insurance ?
Joint life insurance policy should be bought by such persons who have a spouse dependent on them. The resolution of providing additional financial support to the life partner in your absence can be fulfilled by purchasing a joint life insurance policy through them.
This life insurance policy is also cost-effective in a way because in a single policy the policyholder has to pay a single premium which is comparatively high. Through joint premium, you can reduce your premium as well as get more benefits by extending your coverage to your dependent spouse. Hence, if you are married then buying joint life insurance is beneficial as well as essential for you.