Gone are those days when only the male member of the household was responsible for the family’s financial needs. Today, in most cases, both the spouses contribute equally towards the household costs through their incomes. This makes economic sense, as two earning members can offer more comfort to the family. This is why it has also become imperative that both members opt for life insurance.
If you have a similar situation, buying a joint term plan makes more sense, as purchasing two separate policies for you and your spouse will be costlier. If you are wondering what is term insurance for spouses, read on to know more.
What is a joint term insurance policy?
A term insurance plan is a form of life insurance policy that offers life cover for a specific period. In case of an unfortunate event leading to the policyholder’s absence during the policy tenure, his or her nominees get a lump sum as the death benefit. As a term plan only offers death benefit without any savings or investment option, it is much more affordable compared to other types of life insurance policies.
A joint term plan has similar features as a regular policy, but it is for two people. This means you and your spouse can purchase one term plan, covering both of you, and pay the premium jointly. In most cases, the insurance company pays the sum assured to the surviving policyholder if the other policyholder is absent due to unforeseen circumstances. Once the insurance company pays the benefit, the term plan expires.
Advantages of a joint term insurance policy
There are many joint term insurance benefits, making it a valuable life insurance policy. One of the best things about this term plan is that it is extended to all married couples, even if one of them is not earning. A joint term plan is also easier to maintain, as both the spouses have one policy, which they can track. Both spouses will have the required information about payments and benefits, which simplifies the claim process.
Joint term insurance policies offer additional benefits to the secondary policyholder. For example, some insurance companies do not close the policy in case of the primary policyholder’s absence. The term plan stays active until maturity, but the secondary policyholder does not require to pay any premium.
Variants of a joint term insurance policy
The offerings of a joint term policy can vary among insurers. Here is a list of the most common ones:
This is the most common element associated with a joint term insurance policy. In a general term plan, an insurance company pays the lump sum to the policyholder’s nominees in case of his or her unfortunate absence. In the case of a single death payout term plan, the benefit payment works similarly. The only difference is that insurers pay the money to the surviving spouse. Once the payout process completes, the joint term insurance policy expires.
The dual payout term insurance policy continues even after the insurer pays the death benefit to the surviving spouse. He or she can assign nominees who get the additional lump sum in case of another unfortunate event during the remaining policy tenure.
A joint term policy offers certain supplementary features. Some insurers provide regular income benefits to the surviving policyholder for a specified period. A few insurance companies also offer riders like critical illness as an additional benefit to the existing joint term insurance policy. Hence, when you plan to buy a term plan, consider adding your spouse for extra features, and you can get a suitable policy at an economical cost.
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