A joint life term insurance policy covers two people under a single policy. It is affordable for couples, business partners, parents, and children to get life insurance protection. The premiums for a joint policy are usually lower than for two separate individual policies. However, the death benefit is only paid once after the first insured person dies. Let's examine joint life insurance in more detail.
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Let’s discover how joint life insurance can provide financial security and peace of mind for you and your loved ones.
If one spouse dies, the other receives the payout.
If both spouses die, the beneficiary receives the payout.
After the first death, the surviving spouse can choose a lump sum or regular income.
Premiums are eligible for tax deductions under Section 80C.
A joint life insurance policy covers two people under a single contract. The policyholders can choose between covering themselves (such as a married couple) or another person (like parents insuring a child). The insurance company pays the death benefit after the first insured individual dies, meaning the pay-out is on a first-death basis.
After the initial payout, the second person is no longer covered. The beneficiaries receive the lump-sum death payment tax-free. They can use this money to pay outstanding debts, cover funeral costs, fund a college education, or provide financial security.
Rahul and Priya are married in their 30s and have two young children. They decide to get a joint life term insurance policy for Rs 50 lakh to protect their family financially. If Rahul passed away first, the insurance company would pay Priya Rs 50 lakhs. After this payout, Priya would no longer be covered by the policy. Priya could use the Rs 50 lakh payment to pay off debts, cover funeral costs, and help provide for her children's future education and expenses. The lump sum payment would give her financial stability after the loss of her husband.
Here are the most common situations where a joint-term policy offers advantages:
Let’s take a look at the types of joint life term insurance available for policy buyers:
Covering two lives under one policy comes at a lower premium than two separate policies, making insurance more affordable for the average household.
Ensures the surviving policyholder remains financially supported after their partner dies. The tax-free death payment provides funds to cover debts, bills, final expenses and more.
Policyholders can customise their shared death benefit amount based on their financial needs and budgets. Review this sum periodically and adjust if necessary.
Applying, managing, and filing claims for one joint policy is much simpler than two separate policies.
While joint-term policies have abundant strengths, a few drawbacks need consideration:
A joint plan combines coverage for two individuals under a single policy, whereas individual policies are separate for each person.
In a joint plan, the payout goes to the surviving policyholder or beneficiary upon the first death. Individual plans pay out to the nominee, and the policy ends.
In a joint plan, premiums are typically lower. Individual plans require separate premium payments for each policyholder, which can be higher overall.
Joint plans offer less flexibility than individual plans. With individual policies, each person can customise overage amounts, riders, and policy terms to their specific needs and preferences.
ACKO offers an innovative ACKO Life Flexi Term Plan that provides unmatched flexibility for policyholders. Here's an overview of the key features:
Customisable coverage - Change sum assured or policy term easily to keep pace with life's changing insurance needs.
Super affordable premiums start at just ₹534 a month.
Complete control via the ACKO app - track policy, pay premiums, and make claims 24x7.
ACKO Life Flexi Term insurance empowers customers with a powerful yet budget-friendly solution to protect loved ones from financial uncertainties. The flexibility to tweak coverage and lower premiums enhances its appeal further.
Riders provide additional coverages that can be added to the base joint life insurance policy for extra premiums. Some critical riders are:
Provides additional payout if death occurs due to an accident. Useful to cover high-cost needs.
Lumpsum payout on diagnosis of pre-defined critical illnesses like cancer, heart attack, etc. Covers treatment expenses.
The policy waives future premiums if the insured becomes disabled and cannot work. Thus, coverage continues without payment issues.
Provides monthly income for the family to maintain a lifestyle if the insured passes away during the policy term.
Notify insurers about the insured's death/critical illness diagnosis with required documents.
The insurer verifies the policy, coverage and documents and may request further proof to validate the claim.
The insurer processes requests based on policy terms and conditions upon satisfactory verification.
Finally, the insurer pays out death benefit/rider benefit to the nominee/beneficiary as applicable.
The process must follow IRDAI guidelines for prompt claims settlement.
Consider these aspects while choosing the right Joint Life Insurance Policy for you and your loved ones.
Focus on the right coverage amount needed to protect financial needs
Premium affordability
Policy term - 10, 20, 30 years, etc., based on the income cycle
Types of riders to expand protection
Exclusions, limitations & waiting periods
Claims settlement record of insurer
Strike an optimal balance between premiums and coverage across the expected income cycle before purchasing.
The older the primary insured person is, the higher the premiums tend to be. This is because mortality rates rise with age, so the insurer is at a higher risk.
The higher the coverage or death benefit the policy provides, the higher the premiums. This is because the insurer takes on greater financial risk in the event of a claim payout.
Premiums are typically lower for longer-term policies, such as 20 or 30 years, compared to short-term policies of 5 or 10 years. The insurer can invest the premiums over extended periods to offset some mortality risks.
Applicants may need to provide current medical reports reflecting key parameters like cholesterol levels, blood pressure, etc. Depending on the severity, if any declared health issues exist, they can raise premiums or even prevent qualifying for coverage.
Habits like cigarette smoking or tobacco use will significantly increase premiums due to increased mortality risk.
Risky occupations like mining, forestry, aviation, etc., tend to have higher premium loadings as daily work activities increase the chances of fatalities.
A joint life term insurance policy offers dual protection at affordable premium rates. Joint Term Policies and Endowment Plans are two types of joint life term insurance. Use smart tips to compare life insurance quotes across providers. Ultimately, pick a customisable plan that provides long-lasting and reliable coverage.
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.
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Reviewed by Vaibhav Kumar Kaushik 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
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