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Joint-Term Insurance Plan vs Separate Term Insurance Plan | IIFL Insurance
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Joint-Term Insurance Plan vs Separate Term Insurance Plan – Which one is better?

Term insurance is becoming a popular choice among policy buyers due to its several advantages. Different types of term insurance plans are available in the market, and individual and joint-term plans are amongst them. But, which one to choose? 

Let us take an example – Manish Kumar works in a private company. He is not married and his family depends on him. Although Manish already has an individual term plan, he doesn’t know what to do next after his marriage? Should he buy another plan for his wife or choose another option? So, after consulting an insurance advisor, Manish came to know about a joint life term insurance plan which works as a single policy that will help get significant benefits. As a result, he bought the plan and saved more money. 

What is an Individual Term Plan?

An individual term plan is suitable for those who want to protect their family from financial insecurity. It allows a nominee to receive the sum assured amount after the death of the policyholder. Additionally, the plan offers riders like accidental death benefits and critical illness coverage for individuals to receive higher coverage. 

What is Joint-Term Insurance Plan?

The joint-term insurance policies are ideal for couples because both of them are covered under the same plan. In this policy, a spouse will receive the sum assured amount when the other partner dies. If both pass away, then the amount is payable to their children that help to live a comfortable life. There are also policies like joint-endowment plans where it comes with an investment component and insurance. It makes feasible ways to ensure a consistent income until a policyholder retires from their work. On the other hand, the plan does offer add-ons or riders but with limited options. 

What are the features of joint-term insurance plans?

Here are the 4 best features of joint-term life insurance Policies as listed below:

  • Claim options: The joint-term insurance policy offers several claim options similar to a single policy. The claim amount can be received as a lump sum or monthly income or both. 
  • Economical: Joint term insurance is an economical option as a single premium is payable for the life coverage of both partners. Buying separate term plans might lead to additional expenses which could be not affordable. 
  • Easier to maintain: One of the primary advantages of a joint-term plan is it is easy to maintain and helps keep track of payments with ease. On the other hand, having two separate plans will result in double hassles that need proper attention. 
  • Rider benefits: Some insurers provide rider benefits for a policyholder, such as built-in accidental death or terminal illness coverage. 


How to choose the best joint-term insurance?

Those who want to choose the best joint-term insurance policy should consider reading reviews and testimonials online. This will help gain a lot more ideas quickly, allowing a policyholder to choose the right one according to your needs. However, it is necessary to know the requirements and other things in detail before purchasing a plan. Buying the correct type of term plan allows couples to focus more on their financial goals and income protection that will help them get peace of mind from unwanted problems. Moreover, one can use the online term insurance calculator to determine the premium prices which fit their budgets. 

What are the pros and cons of a Joint-Term Insurance Plan?

While buying a joint-term plan, one should know the pros and cons that will help make the best decision. 

Pros of Joint-Term Life Insurance

  1. It covers both partners under a single policy. 
  2. Cost-effective life coverage for both partners. 
  3. A waiver on premium plans upon the death of the life insured. 
  4. Allows children to ensure future financial protection. 
  5. Tax benefits for that will reduce tax outgo.

Cons of Joint-Term Life Insurance

  1. It requires a new individual policy after the death of a spouse when it comes to single payout cover.
  2. The plan’s ownership gets affected in case of a divorce, and a spouse has to bear the premium if another partner stops paying the premium amount.
  3. The coverage amount is low when compared to individual plans.
  4. Only one benefit is payable to the beneficiary when both policyholders die in an accident.

Differences between Individual Term Plan and Joint-Term Plan

A separate term plan is suitable for individuals who started working recently and support other dependents in a family. On the other hand, joint-term insurance enables couples to get life cover under a single policy and save on policy premiums. Even though both the policies offer rider and add-on benefits, they are very limited in a joint-term plan. 

The joint-term plans let couples focus on combined financial planning that will help minimize risks. However, individual term plans offer high sum assured amounts when compared to other plans. Each insurance option has its pros and cons. Therefore, it is necessary to understand them properly before investing money. Policyholders should know joint term insurance plan benefits when they want to choose a single policy. They should also evaluate the advantages of buying two separate individual plans.

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