What is Joint Term Insurance and How Does It Work?

Written by : Knowledge Centre Team

2026-01-19

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5 minutes read

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In an attempt to cover unforeseen life events, Delhi-based Sanjay and Roopali Gupta planned to safeguard their future. To do so, they 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 the ease of managing the policy made the couple opt for a joint term plan.

Let’s learn more about what joint term plans are and how they work.

Key Takeaways

A joint term plan covers both partners under one policy, offering financial protection and ease of management.
These plans often include lump sum payouts and regular income benefits for the surviving partner.
Joint plans can simplify financial planning for young couples looking for comprehensive protection.
Joint term insurance can be more cost-effective than two individual policies, with added tax benefits.
If one partner unfortunately passes away, the other remains covered without paying any future premiums.

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 in case of the unfortunate demise of either of the two insured and, in some cases, regular income to the surviving partner. In the event of the untimely demise 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 in 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.

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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.

The following is a comparison drawn to ease the decision-making process of the same:

Cost-effectiveness: 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.
Tax Benefits: Just like individual term plans, joint term plans also qualify for tax benefits under Section 80C (for premiums paid) and Section 10(10D) (for death benefits) of the Income Tax Act. The advantage here is that a single plan may offer consolidated tax savings.
Premium Waiver Advantage: A key advantage of a joint term plan is the waiver of premiums in the event of the death of one of the insured partners. If one of the partners dies, the surviving partner would not have to pay premiums in the future, while the coverage will continue.
Lump Sum Payout: In the event of the first death, the surviving partner receives a lump sum payout (depending on the plan’s terms). This helps in managing immediate financial needs and maintaining stability.
Wider Coverage on a Budget: 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.
Variable Payout Options: 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 receives the sum assured, and the policy terminates.
Regular Income Benefit: Some joint plans have additional provisions. In case of the death of a partner, the surviving partner gets a regular income for a fixed period of time that can extend up to 60 months. The regular income is paid over and above the death benefit paid to the surviving partner.
Extra Inbuilt Features: Some recent joint term plans also offer benefits such as an inbuilt accidental death benefit and an inbuilt terminal illness benefit.
Lack of Customisation: Despite the 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.
Limitations in Claim Scenarios: If both partners die in an accident, a single death-related payment will be made to the nominee.

Impact of Divorce

In addition, if the couple files for divorce and begins living separately, the joint policy becomes void. In simpler terms, it has to be terminated.

Choosing between a joint or individual term plan depends on your financial goals and family structure. Here's the difference table for better understanding:

Factor	Joint Term Plan	Individual Term Plan
Coverage	Both partners are covered under a single policy	Each partner has a separate policy
Premium Cost	More economical compared to buying two separate plans	Higher overall cost for two individual policies
Premium Waiver	Surviving partner’s premiums are waived	No waiver; premiums must continue
Tax Benefits	Available under Sections 80C & 10(10D)	Available under Sections 80C & 10(10D)
Flexibility	Less scope for customisation	Highly customisable with individual add-ons
Claim in Case of Divorce	Policy becomes void upon separation	Plans remain unaffected
Claim Payout Options	Lump sum, regular income, or both (based on plan)	Lump sum or custom options

Conclusion

Post the 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 unfortunate demise of the policyholder. With growing uncertainty in the economy and business, term plans have gained prominence and become a valuable tool in the hands of insurance providers and consumers.

The iSelect Smart360 Term Plan by Canara HSBC Life Insurance offers whole life cover, multiple payout options and an 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.

Once you have gone through the ins and outs of the policy, you can now safely purchase it online through our website only. Let’s create a secure future together today.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.