Riya’s cousin brother got married recently. He’s a chartered accountant by profession. He knows that insurance is the best way to stay financially covered. And that a term plan is a must to provide financial security to his family. But the question arises here “Whether he should opt for a joint term insurance policy or two different term insurance plans?”
As a married couple, you can opt for a joint life insurance plan. Alternatively, you can opt for two separate term insurance plans. The dilemma whether a joint term insurance or two separate term insurances is little confusing. After going through the difference between a joint term insurance plan and two separate term plans you will be in a position to decide which one to opt.
First of all, term life insurance is meant to cover the risk of untimely death of the life assured. When first the term insurance was introduced, it was meant to provide financial security to the family of the breadwinner targeted towards the earning member of the family out there looking to support their family in case of uncertain eventualities.
Nowadays, more and more women are working and contributing to the family. Since both the partners are contributing to the family’s financial needs, insurance companies faced with an increasing demand to come up with a term plan covering both the partners in a single policy. This was done and executed effectively by launching a joint term life insurance plan. Now, as a married couple you can also cover your spouse in a single policy, by opting for a joint life cover.
In Joint term Insurance both the partners life assured are covered in a single policy and pay a combined premium. The policy tenure is fixed at the time of purchase and throughout the period premium is paid. If during the policy tenure any of the partners passes away, the surviving partner gets the life cover amount.
If both the partners die together in an event the death benefit will be paid to the legal heir(s) as mentioned in the policy. However, there will be no monthly payout. That is, the death benefit will not be made double in such a case.
In case of a divorce, one can’t divide the sum assured or the policy into two. That said, any one of the partner will be paying the full premium amount if he/she wishes to keep the policy in force.
So, one may want to talk to the insurance company to avoid any of such problems and must check whether the insurance company offers a joint term insurance policy with the right to split the policy in case of a divorce. And if not, what is the possible solution.
If both are covered under two separate term insurances, such issues would be out of question.
Before buying, one should examine family’s requirements, it totally depends on one’s needs and vary from family to family.
Select carefully. Choice is yours. Make it a good one.