Joint life insurance enables two people to be covered under the same policy, saving them the hassle of having to pay twp separate sets of premiums, maintaining receipts and remembering due dates etc. This is a very good way to insure life and is particularly beneficial for couples or business partners. However, unlike the single policy where the sun assured is immediately given to the nominee, the maturity value or sum assured in case of death of a joint life insurance policy is paid only once at the time of either insurer’s demise.
Joint life insurance benefit for children
Joint life insurance policy benefits not only the second life insured in the policy but also the children who would receive the sum assured in case of the demise of both parents. There can be a clause stating that the money will be paid only after the death of the first life insured or second life insured, but in most cases it is the first type. If both of you have a high risk job and share the same interests then you may come under the second type.
As the chance of indemnifying the death claim in a joint life insurance is higher, so the premium is significantly more than what it would be in a single insurance. But the best thing about the policy is that even if an untoward incident occurs and either one or both parent lives are lost, the future of the children is secure. This is why the premiums for joint life insurance policies are heavy.
Joint life insurance is good for business
Business partners stand to benefit too. In case you have a business that is run jointly, you could think of going in for a joint life insurance policy as it gives you the option of a single life annuity or a last to die annuity. This means that you can choose whether you want the sum assured after the death of the either one partner or opt for the second one which pays at the death of the second life. Either ways it is a good to have joint life insurance.
Advantages of Joint Life Insurance
• If you compare a single life insurance with a joint life insurance, the premium rates are high but definitely less that two separate policies combined.
• You will be paid dividends annually. You could opt to take them collectively at the end of the term of the policy or be paid in cash annually.
• You could take a loan against your joint life insurance policy and pay back the amount in installments at the prevailing market rate of interest. In case you are unable to pay back the full loan amount, the insurance company will deduct the remaining amount from the sum assured when the policy matures.
• This option protects the joint life insurance holders against incidents wherein they are unable to pay premiums, for example paid-up insurance, automatic premium loan and cash surrender.
• The critical illness clause ensures that the joint life insurance policy holders will be paid a lump sum in case of cancer, stroke or a heart attack, thereby securing their future after a serious illness.
