A Joint Term Insurance Or Separate Term Plans: Which Is Better For A Couple?
Most of the couples do not understand the difference between the concept of joint term insurance and two separate term insurance plans. To start with, a couple needs to understand the pros and cons of both the separate term insurance plans and joint term plans. This article will help you understand the importance of both options.
When it comes to buying a term plan, there are many factors you need to keep in mind as a couple. First of all, the couple should be aware of the term plans specifically designed for couples. After knowing and evaluating both joint term insurance and the separate term plan, the couple would be able to take a better and informed decision.
What is Joint Term Insurance Policy?
On a simpler note, a joint term insurance policy helps both the partners to secure their lives. The main objective of this term plan is to provide financial security to the surviving partner in case of untimely death of one partner. The objective of this term plan is to extend financial security in the time of emergency.
In recent times, it is a common scenario to find working women and making financial contributions to their families. As both the partners are working and taking case of their financial needs, insurance companies have come up with the idea of joint term plan to cover both the partners in a single policy.
Now, it is important for both the partners to know how the joint term insurance plan executes.
How Joint Term Insurance Plan Executes?
In a joint term insurance plan, both the male and female partners are insured and are bound the pay the combined premium. As usual, the tenure of the policy is fixed at the time of buying and they are obliged to pay throughout the premium paying period. Let’s have a look on how it is executed.
Some of the insurance companies pay the life cover amount in the form of sum assured to the surviving partner and then the policy ends. While in some circumstances, the insurance companies pay lump-sum amount at the time of claim, if any of the partners die and give the surviving partner opportunity to receive the monthly pay-outs for a fixed number of years.
In the meantime, probably you are thinking of some questions regarding the joint life plan. So for your consideration, there are few questions and their proper answers given below:
- What will happen if the surviving partner passes away during the period of monthly payout?
The monthly payout will be provided to the legal heir as mentioned in the document of the policy.
- What will be the consequences if both the policyholders (spouses) die together?
In such case, the sum assured would be given to the legal heir or the nominee as mentioned in the document of the policy. But, the legal heir would not enjoy any monthly payout.
- What will be the result, if the married couple get divorced?
In case divorce takes place between the couple, they cannot divide the sum assured. They cannot split the policy into two. So, it is advisable that any of the partners should go to the company and table the problem to avoid the uneasy situation.
Joint Term Insurance or Two Separate Term Plans
The couple should take buying a term plan into consideration. Prior to buying the term plan, they need to evaluate and examine their requirements. It
Let’s have glance on the comparison between the separate term plans and joint term plan. It will give you clear idea on the subject:
|Main Points||JOINT TERM PLAN||TWO INDIVIDUAL TERM PLAN|
|Who should be covered?||Both the member of the couple under a single policy.||Both will be benefitted under the two different term plans.|
|Liberty to choose the sum assured||It depends on the annual income of the family.||It is too depend on the annual income unless bothe of them reaches the same income category.|
|What will be the consequences, if the any of the life assured die?||The beneficiary will get full payout of the sum assured. If the policy ends on the death of any of the partner , then the surviving partner will be uninsured and he or she have to buy another plan at the older age with paying the higher premium.||The beneficiary will receive the full payout and the policy of that policyholder terminates. But the other partner stay insured as both the policy are different.|
|What will be the consequences, if both the partners pass away?||In such case, the legal heir would be given the pay outs.||In such event, the legal heir would get the double pay out from both the policies.|
|Ideal for||It is ideal for both the low income person and the homemaker.||If both the member of the couple are employed and less or more annual income.|
So, overall, couples buying term plan together have two different options: either, they can purchase a joint term insurance plan which covers two people in a single plan or they can purchase separate plans for each of them. It all depends upon your preferences and budget planning, which one would suit you better.