Joint Life Insurance
Unlike earlier, majority of the modern day families have working couples bringing home dual salaries, and contributing jointly to the total family income. Traditionally, a single life insurance policy was considered adequate for the only income-earner in the family. But with changed times, the task to choose the optimum life insurance package for the family has also undergone changes-now most financial experts would recommend buying a joint life insurance scheme to save money instead of investing in two separate policies.
- This policy saves costs because maintaining a single policy is cheaper than maintaining two policies.
- Can help you in estate planning.
- The terms can be flexible and you can customize it to suit your needs. It may pay death benefits when the first policy holder dies or alternately, when the second policy holder passes away.
- Extremely lucrative for those couples who are joint owners of a family business. It helps to keep the company running without breaks that may occur because of estate resolution.
- The policy may be written in the form of a trust bearing the children’s names. This means that in the event of the death of the second policy holder, the policy will automatically be passed onto his or her beneficiaries. The beneficiaries will not be deprived of benefits or bothered by proceedings relating to estate resolution. If this is not taken care of, there are many instances where business assets are forcefully liquidated to pay for estate tax dues. In such situations, many family businesses get discontinued because the second generation is not in a position to sustain it.
- When beneficiaries can easily access the benefits from such a policy provided as a trust, there is no dearth of funds to pay for the funeral costs of the deceased or for continuing the family business.
- The insurance provider will not charge you additionally for writing this policy for a joint life insurance as a trust. Advisors can guide you through the other matters of estate planning and guarantee your beneficiaries will never be troubled by shortage of resources forcing them to part with their assets to pay their estate taxes.
- Besides estate planning, a joint life insurance policy is ideal for couples not owning a mortgage life insurance.
- You can customize the policy so that the beneficiary receives death benefits upon death of the first policy holder and he becomes the only surviving policy-holder from that instance.
- This surviving policy owner is free to use the policy to pay off any remaining mortgage. However, in this set-up, children or other beneficiaries are not entitled to get any further payouts.
The joint life insurance scheme is well-suited to couples owning family businesses which they hope to pass onto future generations. But for couples earning dual incomes through diverse professions, this policy is not so lucrative because salaries are different and a joint package may not provide them with the most comprehensive coverage.