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.
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.
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.
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 Smart360 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.