Should Couples Buy Joint Life Insurance?

Life insurance policies come in many forms, catering to specific needs and goals a person can have. Term life insurance is meant to cover the risk of the untimely death of the life assured in terms of the financial blow it entails for the dependents and family members. Traditionally, a term plan was designed in a way that it covers the life of the primary breadwinner of the family. However, nowadays women have stepped into the economic sphere and are just as engaged professionally as men are. This means that the concept of a sole breadwinner is archaic.

Nowadays, it is common that both the partners are working and contributing to the family's financial needs. An increasing need is now being felt for life insurance cover for the spouse also. To make the insurance coverage easy for such 'double income nuclear families', you can also cover your spouse in a single policy, by opting for a joint life cover. 

What is a joint term life insurance?

Under a joint term life insurance policy, life of both partners are assured and covered in a single policy with a combined premium.

A joint term life insurance is given on a first-death basis. Such a policy acknowledges the fact that the life of your partner is equally important. In that spirit, the payout is received by an insurer in case of the death of his/her other insured partner during the policy period. Usually, when you apply for a life insurance policy, you mention a nominee or beneficiary. In Joint Life Insurance, both you and your partner will be the owner as well as the beneficiary. So, in case something happens to one of you, the other will receive the benefit of the life cover. This payout could also be doled out as regular income to pre-specified surviving family members.

The nitty-gritty of a joint term life insurance

It functions just like any traditional life insurance plan, except two lives are assured here: you and your partner pay a premium for a fixed period, during which time you can claim for the life cover amount in case either one of your dies. However, once a claim has been made, the cover given under the policy expires. You or your partner will then have to buy another life insurance cover at a revised rate of premium.

Why is a joint term life insurance policy preferable?

A joint life policy is preferable because the payment received upon the death of either of the partners is significant in comparison to the amount invested in the policy.
It is especially suitable for young couples, those with small kids, or couples that are working to pay off outstanding debts like home loans or the like. Since the payment received in case of the loss is substantial, it will help safeguard the future of the kids or the surviving spouse without pushing them into crippling debt. Even if you have a non-working spouse, you should consider getting this policy. Taking care of dependents and the household can be daunting in their absence and a little financial stability could go a long way in easing the burden.

Buying a joint term life insurance policy is usually cheaper than buying two separate individual life insurance policies for the same couple for the same sum assured. But there is always the other side: if a couple decides to separate/divorce, they can’t divide-up the policy. 

Thus, if you are getting married soon or planning to start a family, it would be worth looking at a joint term plan. After all, financial stability ensures marital bliss.

To know more about term plan, term insurance, long term savings & retirement plan visit PNB MetLife website.