Joint Life Insurance Policy: Married couples have resonated open-heartedly to the joint life insurance policies. The insurance companies offer lucrative deals to the joint life insurance policies that make their single policy cost to be cheaper than compared to the total cost of two different policies.
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In most of the insurance plans, there is one policyholder and one nominee. However, in the case of joint insurance cover plan, both the policyholders are the nominees to each other. It means if something happens to one of the partners, then the other one is liable to claim the insurance amount.
In order to understand the joint insurance policy with a better perspective, here we present to you the detailed information on types of joint insurance plans:
There are basically two types of plans in joint insurance policies:
Just like any term insurance cover, in a joint term plan, the policyholders pay the premium to the company for a given period of time. The two policyholders act as a single entity for the whole term of payment. However, in case of death of one of the policyholders, the other one is liable to claim the policy benefits as decided at the time of buying the policy.
The endowment plan is very much similar to the term plan itself, however, the difference comes from the investment angle here. In the joint endowment plan, the policyholders pay the premium for the policy till a fixed period of time. At the time of maturity of the policy, the policyholders get the amount ensured with the policy cover as well as the bonus associated with the policy for the whole term. In case of death of one of the beneficiaries during the term of the policy, the surviving partner can claim the policy amount and the bonus will be given only for the number of years for which the policy was effective.
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Key features of the joint life insurance policy:
• A joint life insurance covers both the partners under the same set of terms and conditions despite their gender and financial positions. For example, if one partner is earning highly while another one is just managing the day to day expenses- it doesn’t matter! You are treated equally in your joint life cover.
• Most of the joint life cover plans are meant to pay out only for the single partner death i.e. single payout. If you are looking for a plan otherwise, you need to talk to your insurer about the available options. In some cases, often the kin of the policyholders come forward to claim the death benefits of the second policyholder as well. If one of the beneficiaries has died and the claims have been made once, the policy gets expired then and there. There is no possibility of second payout the claim if else mentioned in the policy otherwise.
• If the married couples break up or get divorced during the term of the policy, at least one of them needs to keep on paying the policy amount in full. In some cases, the policyholders tend to divide the payment money. In such cases, if one of the partners doesn’t pay in full, the policy ceases there and then. Therefore, it is not allowed for the partners to divide the premiums.
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These are some of the key features that should be known to every individual who is planning to buy the joint life insurance coverage plan.
The advantage of the joint life insurance policy is that its cost is cheaper than the two separate policies and ensures two beneficiaries in one single plan. However, the partnership needs to be kept intact during the term of the policy. The problem occurs when the partners separate or either of the partners is not fully aware of the benefits and terms that have been discussed during the policy buying. See about term life insurance.
If you are considering buying the joint insurance policies with your partner, first sit and discuss the terms with each other. It is better to get all your doubts clarified before investing your money.