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What Is The Concept Of Joint Term Insurance

What Is The Concept Of Joint Term Insurance

Joint Term Insurance

In an attempt to cover unforeseen life events, Delhi-based Sanjay and Roopali Gupta planned to safeguard their future plans and looked at several insurance plans. After carrying out a detailed analysis of different insurance policies, the couple, who got married in 2018, eventually decided to opt for a joint term plan. The decision to choose a joint plan was made to meet long-term goals and provide financial stability in case of an unforeseen event. The convenience of covering both partners in one policy and ease of managing policy made the couple opt for a joint term plan.

What is a Joint Term Plan

A joint insurance plan covers two individuals under a single policy and is primarily designed to cover couples. This is a comprehensive plan that offers multiple benefits for both partners. It offers a payout on the death of either of the two insured and, in some cases, regular income to the surviving partner. In the event of death of one of the partners, the other partner can claim the life cover amount.

Instead of taking individual policies for both partners, joint term insurance can prove to be a better option, particularly for young couples. Joint insurance eliminates the need to take two separate insurance policies for both partners. As both partners are covered in the same plan, there is relative ease of tracking and making premium payments. The sum assured in a joint plan is calculated on the basis of several factors including the primary policyholder’s age, medical condition, income and lifestyle. For the secondary policyholder, the age and medical condition are taken into account.

Joint term plan vs. individual term plan

The decision to choose between a joint plan and individual plan must be made after assessing the benefits and drawbacks of both types of plans. Users must carefully assess the policy benefits, payout schemes as well as their own requirements and long-term goals to choose a plan. While some people may find a joint plan more suitable, others may like to go for an individual term plan that can meet their specific requirements.

Taking two separate insurance policies can prove to be costly in the long term. A joint plan can be a better option as partners do not need to pay different premiums for individual plans. Further, a joint plan may lead to additional tax savings. Tax benefits can be claimed on premiums paid and benefits received under such a plan. A key advantage of a joint term plan is waiver of premiums in the event of death of an insured partner. If one of the partners dies, the surviving partner would not have to pay premiums in the future while the coverage will continue. Further, the spouse would get the assured lump sum immediately. Joint insurance can provide a wider coverage than a single individual policy. Couples on a tight budget can consider a joint plan that best meets their requirements.

The payouts in a joint plan can vary under different circumstances. Some joint plans pay out on a first claim basis. In the event of the death of a partner, the surviving partner gets the sum assured and the policy ceases. In another type of joint insurance, there is a payment on the death of each insured person separately. Some joint plans have additional provisions. Incase of the death of a partner, the surviving partner gets a regular income for a fixed period of time that can extend upto 60 months. The regular income is paid over and above the death benefit paid to the surviving partner. Some recent joint term plans also offer benefits such as inbuilt accidental death benefit and inbuilt terminal illness benefit.

Despite its several benefits, the joint term plan also has a few drawbacks. In case of separate term plans, both policyholders are free to choose add on covers and benefits to meet their personal requirements. If both partners die in an accident, a single death related payment will be made to the nominee. In addition, if the couple files for a divorce and starts living separately, the joint policy becomes void and has to be terminated.

Conclusion

The current pandemic crisis has accentuated the need for people to cover unprecedented situations with a term plan. These are tailor-made plans that provide financial stability and assistance in case of unprecedented events. These plans ensure that the family goals and lifestyle are not altered after the death of the policyholder. With growing uncertainty in economy and business, term plans have grown in stature and have become a useful tool in the hands of insurance providers and consumers.

The iSelect Star Term Plan from Canara HSBC Oriental Bank of Commerce Life Insurance offers whole life cover, multiple payout options and increased coverage option. This flexible term plan can be aligned to your specific requirements with different options for coverage, premium payment and benefit payouts. It also offers a return of premium benefit that can be availed once you outlive the policy tenure.

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Frequently Asked Questions (FAQs) for Term Insurance Plans

A person can only purchase a term insurance plan till the age of 65 years, and they can choose the risk coverage for up to 99 years of age. One can easily buy the best online term plan between the age of 18 to 65 years.

This being a term insurance plan doesn't offer any payout after maturity or expiration date

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 65 years of age. This is a term plan with return of premium option – that means all the premiums paid throughout the tenure will be paid back to you if you outlive the policy.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly when you buy the best term plan in India.

If your key purpose is to give your Family financial protection, go for the best term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan. iSelect Star is a term plan with return of premium option. All the term insurance premium will be paid back to you, if you outlive the policy term.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, the best term insurance plan pays a part of the sum insured to treat your disease.

Term life insurance plan riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance plan riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term insurance policy remains active until the expiration date.
  • Income Rider: This rider in a term insurance plan ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term insurance plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to ask while Buying the Best Term Insurance Plan?

  1. 1. Are you buying a term plan with return of premium?
  2. 2. Amount of premium you have to pay based on your age, habits, education, and monthly income
  3. 3. The total number of benefits covered in the term insurance plan. Do they include benefits that you care about the most?
  4. 4. How to save money on tax if you pay for the term life insurance plan?
  5. 5. Do they offer regular income options?
  6. 6. Can you change the coverage and premium in the future?
  7. 7. Does the claim consider valid if death occurs outside India?
  8. 8. Which kind of death is not covered by a term insurance plan?
  9. 9. Can NRIs take a term insurance plan? If yes, what are the conditions?
  10. 10. Does the term insurance plan have a cash value if you decide to cancel the term insurance policy?
  11. 11. Under what circumstances can a term insurance plan be cancelled?
  12. 12. Can I pay the premiums online or make electronic payments?
  13. 13. What will happen to the term life insurance plan if the life assured starts smoking after purchasing the policy?
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