Opting for a joint life policy, is it a smart move?
Written on Friday, October 9, 2015
By Kumar Pushpraj
Recently few insurance providers have rolled out plans that would offer joint cover to couples under a single policy. But when we can fulfill our insurance requirements by opting for separate covers, is there really a need for such policy? Why would you opt for joint life policy? This blog will take you through both the aspects of these plans, so that you can easily decide whether it suits your need or not.
The primary benefit a joint plan offers is the waiver of premium feature. In situation of a policy holder’s death, the surviving spouse, who is entitled to a cover of up to 50% of the primary insured's sum assured, gets exemption from future premiums to keep his or her cover in force. If a couple let’s say both 40 years old opt for a joint cover policy, husband is insured for 1 Crore and wife has a sum assured of 50 Lakh. Incase husband dies, wife will be entitled to receive the sum assured i.e. 1 Crore and additionally her cover of 50 Lakh will carry on the way it is without paying any further premium for the same. It would offer a sense of peace to the surviving partner.
Another important benefit this plan offers is regular income. Suppose both the partners are no more but they have child, in this case, child will receive a lump sum or regular income monthly that would help him with education and other daily needs. Due to premium waiver option, joint policy can also prove to be a smart move by saving some premium amount as this plan is cost efficient in long run when compared to individual policies.
But, before opting for such covers, we would advise you to evaluate your situation. This can be a good choice for couples with liabilities such as home loan etc. But in case your better half is not drawing any regular income, it would not be a wise decision to get her covered. Upon evaluation of this policy, we cannot ignore unpleasant events such as divorce. In situation of separation insurance needs will also get separated making it more complicated as policy will lapse and you would have to buy a fresh cover, which will carry a higher premium as it is linked primarily to age and state of health. Even if it is an endowment plan, premature liquidity will result in poor returns and loss of embedded life cover.
If you are fully convinced about the suitability and value of joint life cover offers, we would suggest you to split your insurance equally between a regular term and a joint life policy.
Some of the plans available are:
-Mera Term Plan by PNB MetLife
-Smart Hamsafar by SBI Life
-iSpouse by Aegon Religare
#Insurance is a subject matter of solicitation, read scheme document carefully before opting for a plan. Nothing in this blog is intended to be a recommendation to buy a product. This is purely for information purpose.