Purchasing a life insurance policy is one of the best investments you can make. It becomes even more important that you buy a life insurance policy if you got married recently. If your spouse is a working professional just like you, then it is imperative that both of you receive protective coverage.
However, one of the dilemmas that you may face is whether it is alright for both of you to purchase separate insurance plans or buy a joint life insurance policy? It is always recommended that you go with the latter option as it allows both you and your partner to look out for each other by providing coverage. In case something happens to any one of you, the policy will ensure that either of you is able to take care of the other’s day-to-day needs. We will look at the type of joint life insurance policies that you and your spouse can purchase and how it can be beneficial for both of you.
How does a joint life insurance policy work?
When you purchase a joint life insurance policy, you receive the cover on a first-death basis. For example, if something happens to you, the insurance company will cover your partner so that he/she can take care of his/her day-to-day needs and vice versa. In a joint life insurance policy, both you and your partner are the owner as well as the beneficiary. However, if both of you die provided that the policy is active, the next beneficiary named by you will be eligible to receive the benefits. of joint life insurance
There are basically two types of joint life insurance products that you can avail:
Joint term insurance plan
A joint term insurance plan works like a regular term insurance plan. You will have to pay premiums in order to keep the policy active. In case you die, the insurance company will pay your partner a lump-sum amount called the death benefit and the policy will expire. Similarly, in case of your partner’s death, you will receive the death benefit. However, once the policy expires, you or your partner will have to purchase the plan all over again.
Joint endowment insurance plan
A joint endowment insurance plan works like a normal endowment plan. You and your partner are not only provided coverage but also given the option of growing your savings. In case of you or your partner’s death, the other person will receive a lump-sum amount called the death benefit. You and your partner will see a regular sum of income credited to your account when the policy matures. This sum is called endowment which will allow you and your partner to take care of ones’ needs after both of you have retired.
Factors to consider before purchasing a joint life insurance policy
There are certain factors that you and your partner must consider before purchasing a joint life insurance policy:
- You must consider your and your partner’s age when purchasing a joint life insurance policy. Insurance companies may not be willing to offer you a policy if you and your partner are old. Even if they do agree to let you buy one, the premiums will be expensive. Hence, it is always recommended that you purchase a joint life insurance policy when you and your partner are young.
- If you are about to get married in the near future, you must purchase a plan which allows you to add your spouse as a member of the insurance policy.
- It is recommended that both you and your partner are on the same page before purchasing a joint life insurance policy. It is important that both you and your spouse agree with the terms and conditions of the plan.
- You must also look for a plan which secures the future of your children. There are insurance companies which provide policies where your children can become a part of the plan and enjoy the benefits in case either of you or both of you die.
- It is always ideal to purchase a joint life insurance policy which offers features and benefits such as a discount on premiums, bonuses, etc.
Why should you opt for a joint life insurance policy?
Some of the reasons why you must purchase a joint life insurance policy are:
- A joint life insurance policy can work as a source of replacement income. In case something happens to either you or your partner, the policy will ensure that the beneficiary does not experience any sudden loss of income. The policy will allow you or your partner to take care of one’s day-to-day needs in case one of you is no more.
- You are likely to pay lower premiums while purchasing a joint life insurance policy. A joint life insurance policy offers you the benefit of availing a dual cover by paying affordable premiums.
- It is relatively easier to manage a joint life insurance policy as compared to you and your partner purchasing two separate policies.
Who else can purchase a joint life insurance policy?
Not only married couples, but business partners can also purchase a joint life insurance policy. A joint life insurance policy allows both people to take care of their business interests in case something happens to any one of them.
Parents can also purchase a joint life insurance policy and make their children the co-owner. This ensures that in case something happens to any one of the parents or both, the future of the children remains safe and secure.
In the end, if you are married, you must surely purchase a joint life insurance policy. It is important that both you and your partner properly evaluate your needs and only after you have compared and researched various plans, you purchase a policy appropriate for both of you.