Alongside what it is, many people are often confused about when they are supposed to get a joint life insurance policy. It is even worse when you don’t have prior knowledge of insurance before looking into this.
Like many other types of insurance, the sole aim of joint life insurance in Canada, among other places, is to protect. However, as the name implies, it does not protect just one individual. Instead, insurance companies design this coverage to protect two people who enter into it.
In some situations, experts will advise you not to even bother about when to get joint life insurance because it is not the best fit. In certain situations, they’re correct. However, other times, a joint life insurance policy is a pretty good idea.
In this article, we’ll be helping you see the helping you understand this peculiar insurance policy better.
What is a Joint-Life Insurance Policy and When Can You Get It?
As morbid as it might sound, a joint life insurance policy is the kind that people go into with their partners on a “first to die” basis. Regardless, what this policy does is that it covers the other person upon the death of their insurance partner.
Unlike normal life insurance, where you choose a nominee, yourself and your joint life partner will function as both the beneficiary and the owner. When something happens to one person, the other person gets the insurance benefits.
Concerning the question of when to get joint life insurance, there is no limit to the time you can get a joint life insurance policy. Many people believe that it is for those who are married. This is true because joint life insurance is perfect for starting your family with your partner.
But, joint life insurance isn’t strictly for conjugal relationships alone. You can get it with your child. Although this isn’t too common for obvious reasons, it is still feasible in exceptional situations.
Alongside that, you can get it with your business partner if you feel the need to protect your interests after crossing certain hurdles in the business. There really is no bar on the entry period. As long as you’re willing and have a “consenting partner,” you’re good to go.
Types of Joint life Insurance Plans in Toronto
If you want to get joint-life insurance, you have two main options. They are:
Joint Term Plan
In this plan, you’ll pay a premium for a fixed period alongside your partner. Within this time, if something happens, one of the two parties, the surviving partner can claim the insurance money.
When the fixed period expires, you can decide to buy a new insurance cover. The only difference is that the “renewal” may be at a revised rate.
Joint Endowment Plan
This is similar to the joint term plan because it also lasts for a fixed period. However, the difference lies in its payment method. In the joint-term plan, the surviving partner can claim the insurance benefits after the first person’s death.
But, in this plan, the insurer will pay you only after the fixed period has expired. Usually, the fixed period only stretches until retirement. Also, the money paid is called an endowment.
However, in a situation where one person dies before the maturity of the fixed period, the surviving partner will get a cover. This cover will be separate from the endowment.
Why Should You Choose Joint Life Insurance?
You now know what it is, what types there are, and when to get joint life insurance. Now, here are a few reasons you should consider getting one:
It has cheaper premiums
Have you ever noticed that when you’re buying in bulk, you can haggle just a bit longer and get the seller to reduce prices? Well, this is the same case for joint life insurance, too.
While the insurance industry isn’t exactly popular for “haggling,” you can still get comparatively cheaper premiums if you opt for a joint life plan.
A joint life plan is one of the best ways to bring about stability if someone loses their partner. It is even more so if the surviving person wasn’t the breadwinner in the relationship before their partner’s death.
So, to ensure financial stability after passing away, it is best to go for a joint life plan. That way, the surviving partner will be able to carry on even though the breadwinner is gone. This is particularly true of a parent-child joint plan.
If the parent passes away first, the child will still be able to take care of school fees, among other things.
At this point, we must’ve answered all the basic questions regarding this topic, including when to get joint life insurance. However, it is not enough to merely read about it.
You also have to act on all this information. If you want to start, begin at Life Insurance Direct. We offer a variety of joint life insurance plans for residents in Toronto. Contact us today to get started!