Invariably term insurance is the most effective form of life insurance which anybody should look for their personal finance portfolio. Plus the affordability and coverage offered by a term plans makes it the most favored financial instrument for anybody to secure future of their loved ones. The plan is simple and straight, in case of demise of the insured person before the completion of tenure of the policy, the nominee get all the benefits at one go. The benefits that the nominee gets are completely tax free in the hands of the receiver under Income tax Section 10(10D).
A term insurance can be quite effective for you as person also. Lets understand by a scenario where you are only bread earner in the family and your monthly salary is something on which rest of the members of family are dependent on for daily needs and long term financial goals.In a scenario like this your death can lead to a financial turmoil in their lives and this is where the term plan that you have brought come as a great help. Other than this the affordability would always an important factor that lets you consider term plan as the right option to get insured.
Though the concept of joint term insurance is very new to India and you will very insurance companies are offering products under this category but still at times the option can be looked as a smart opportunity of getting insured when compared with individual plans. You will also have an option to buy two separate term insurance plans for people who are more important for the rest of the family. Joint Term Insurance Plans a Better Option For Working Couples and the financial plan for the rest of the family is considered on a joint basis.
The key feature of a joint plan and which is mostly common is the expiry of the policy happens on the first claim basis.if both the husband and wife is insured under a joint plan,if any of the member dies first before the completion of the policy tenure the total sum assured is paid to the other partner and policy ends there. But when compared to buying separate individual plans even if one dies still the other policy continues. Some joint plans come with a rider where the other member is paid monthly income till the completion of the plan tenure and on a later stage sum assured is paid. One of the key demerit of joint plan is that even if both the members die due an accidental scenario only one claim is paid. In case of divorce the policy would always cease to exist subject to condition the other member stay prepared to take the burden on him or herself.
Though with all the merits and demerits joint plans are there and generally cheaper compared to buying separate individual plans.It all depend on the scenario and how you are managing your personal finance balance sheet which would define which type of term insurance plan is suitable for your needs.