Decision to buy term plan holds a crucial place in one’s financial plan. It is usually one of the first investments earners make when starting their work career. This plan is usually popular among many owing to their simple payout feature as per the sum assured agreed at the time of buying the policy. Apart from this, the next reason to buy term plan is because it assists the insured to ensure their dependents’ future financial stability once they are no longer around them.
This plan even provides a host of advantages that can be beneficial for working partners too. Some of the term insurance benefits provided to the couples are provision of multiple options to avail benefits, savings on premiums in case the partners have the same lifestyle and share less age gap, tax benefits and easy maintenance.
Under the multiple options, the joint insurance covers 4 major ways to claim the payout. Firstly, on demise of one of the partners, the surviving partner can avail the sum assured in lumpsum and the policy ends after this. Secondly, on demise of one of the partners, the other surviving partner can avail the sum assured amount and continue with his/her insurance cover till the tenure ends or his/her death. Thirdly, on the death of one partner, the other partner can receive the sum assured either in form of regular income at fixed period or in lumpsum. Fourthly, on death of both partners at the same time, the sum assured may be received by their kids.
Here are some of the benefits of adding spouse in a term insurance plan:
Higher sum assured
With joint term insurance for spouses, beneficiaries like kids can even avail the sum assured. Thus, make sure that you have selected a term insurance, which makes the payment out to both the spouses and not only to one. By this way, even if one partner dies and his/her assured sum gets paid, the major beneficiaries i.e. the kids will even receive the assured sum when the other partner dies.
One of the main things many individuals dread about when purchasing a term cover or on making any other type of investment is the documentation and the paperwork that goes into it. However, with joint term insurance, documentation is way convenient and simpler owing to the availability of different kinds of term plans that demand minimal documentation and provide maximum benefits. Also, many of the insurers owing to their development of their online platform enables applicants to apply for joint term insurance online with the required documents with zero need to visit the insurer’s branch physically. Additionally, note that in a joint term insurance, the terms and conditions stay the same for both the policyholders, which means you just require going through the fine print of the policy as opposed to availing 2 different term policies with varying terms and conditions/fine prints in the policy document.
Term plans are one of the cheapest types of insurance. However, premiums payable on a single term policy, which provides cover to just one partner may be considerably higher than premiums payable by both partners on opting for a joint term policy. For partners in most cases it is a viable option to pay towards a joint term insurance that provides adequate cover to both partners instead of paying premiums for 2 separate term insurance plans.
Waiver on term insurance premium
Joint plans may be preferred by partners over 2 separate term insurance because in a joint term policy if one of the partners dies, the other partner receives a waiver on premium. It means that the surviving partner is no longer required to pay the insurance premium to keep the plan active. Despite not paying the premium, the surviving partner will still be able to avail the insurance benefits i.e. the sum assured, and the dependents too will be able to avail the sum assured on his/her death.
While availing a joint term insurance in most cases is a much more convenient option than purchasing 2 separate term plans for partners, it is always tough to know which one would work better. Thus, it is recommended to use term plan premium calculator to know the difference in premiums between both the options and choose accordingly as per requirement.