People who start earning money spend most of their income on house expenses and investments. Although investing money can help increase it over time, unexpected events can happen and cause financial hardship. Your savings and investments may not be enough to provide financial stability for your family if something happens to you.
A life insurance policy is a great way to ensure that your family has enough money for the future. There are many types of policies you can choose from. Joint life insurance is a great option if you plan to invest in a policy together. What is joint insurance? What are the benefits? Continue reading to learn more.
Understanding life insurance
What’s life insurance? Life insurance is a policy that you, as the policyholder, enter into with your insurer. In this agreement, your insurer will pay your family members in the event that you suddenly die. The policy you choose will determine the amount of compensation. This money can be used to pay your family’s regular expenses and set aside for future goals.
What’s joint life insurance?
A joint life policy offers life coverage for two people, as the name implies. This policy is most popular among married couples. It is more sensible to invest in a jointly-owned policy if there are dependents or children who need financial support. Similar to the above, if only one member of the family earns, they will seek to protect their spouse and children, if possible.
This type of insurance policy provides that if one policyholder suddenly dies, the other policyholder will be compensated by the insurer. Imagine a married couple Mr. Ramesh and Ms. Kavita bought a joint insurance policy. Ramesh dies after a few years due to a heart attack. Kavita will be entitled to the assured sum as both Ramesh & Kavita own the policy. Keep in mind, however, that the policy will expire if one of its co-owners dies.
What types of joint life insurance are there?
You and your partner may be interested in this type of life insurance. Here are some things you need to know:
Joint term plans
This plan is identical to a regular term plan. It covers two persons instead of one. The term of this plan may differ from one insurer. The insurer will pay a death benefit to the other policyholder if one of the policyholders dies during the plan’s term. The policy will be canceled once the death benefit has been paid to the coowner.
- Joint endowment plan
A joint endowment plan, which offers both investment and insurance benefits, is similar to a regular endowment plan. The policyholders will receive an amount called ‘endowment’ after the plan ends. The endowment amount will compensate the other co-owner if one of the coowners of the plan dies during the plan’s term. The premium payment ceases automatically after the death of one co-owner. This plan also provides mature benefits.
Should this plan be your investment?
This plan is a good investment if you want to ensure your partner’s financial independence after your death. Joint policies have lower premiums than individual policies. Some policies provide a regular income that is guaranteed to the policyholder who survives. This income can last up to 60 months. Tax benefits are also available. The Income Tax Act Section 80C allows premiums to be deducted from income taxes. The policy’s death benefit is also exempted from tax under Section 10(10D).
Conclusion
This plan is worth considering if you are concerned about the future of your spouse and any other dependents. To find out how much this policy will cost depending on your requirements, you can use our life Insurance premium calculator.
