Term Insurance may be defined as a pure life insurance plan providing financial protection to the family members of the policyholders at a much more affordable rate. If the policyholder meets an untimely demise during the policy term, the nominee(s) will receive the death benefit under the chosen term plan. Term insurance is a cost-effective approach to providing your family with a sizable corpus regardless of what the future holds. As a result, the family can continue to maintain its lifestyle, and the kids can pursue their education as you had envisioned and planned.
The point of this article is to assess the difference between joint and separate term insurance. While joint insurance covers two people at the same time, single-term insurance is meant for individuals. Therefore, it is essential to know which term plan is best for you.
What Is A Joint-Term Insurance Plan, and How Does It Work?
A joint insurance plan is made to cover couples and covers two people under one policy. When one of the two insured persons dies, this plan pays the sum assured, plus, in some circumstances, the surviving partner receives regular income.
Like a standard term plan, your spouse and you each pay a premium for the duration of the policy to continue being jointly insured. In the sad event that either of you should pass away at any time, the other will receive the sum assured. Nonetheless, joint life insurance has some advantages over two individual plans. Now let’s get to a detailed understanding of the difference between a joint and separate term insurance plan.
Single vs. Joint Insurance Plans
Married couples are better off getting joint life insurance term plan coverage because it ends up being more affordable in the long run. The surviving spouse is entitled to the entire sum insured if one of the partners passes away. The insurance is still in force, and the surviving spouse is not required to pay any further premiums.
Now, let’s run a quick comparison between the two!
| Criterion | Joint Insurance Plan | Individual Insurance Plan |
| Coverage | Both are covered under the same policy. | Each person buys an individual policy. |
| Sum assured | Joint income of both policyholders. | Individual income of the policyholder. |
| Death-Either | The surviving partner will receive the payout plan. The continuation of a policy relies on this sort of plan. | The policy terminates when the candidate receives the amount insured. His or her plan protects the surviving spouse. |
| Death-Both | The nominee will get the sum assured if both partners pass away. | Each policy pays the corresponding nominee the money promised. |
| Premium waiver | The surviving spouse is excused from paying the premium in the event of one’s death. | The surviving partner is still responsible for paying premiums. The regulation is still in force. |
| Homemaker spouse cover | Offered with a guaranteed lower price. | Not applicable to those who are not employed. |
When Can You Get A Joint Insurance Plan?
You may already have several options, like PPF accounts, FD receipts, NPS accounts, gold, real estate, etc., in your investment portfolio. Having to manage several insurance policies can only make your problems worse. Why not make things simpler by using a joint-life policy?
You must prepare for every eventuality due to unstable markets, job loss, the introduction of new diseases, and the increase in nuclear families. Individuals may migrate for better chances, work jobs, or manage their homes from home. The sum assured of a term insurance policy may be based on the Human Life Value (HLV), which is approximated to be 15 times the person’s yearly pay. The perks of the joint-term plan come in handy if one of you intends to stay at home with your child until they reach adulthood. In the tragic event that either parent passes away, the sum assured is payable.
Traditional policies discourage providing life insurance to those who are not employed.
The combined policy is more affordable than purchasing two individual policies thanks to the joint term plan. The policy becomes a comprehensive protection plan with additional riders that cover accidents, disability, etc.
What Are The Features Of Joint Insurance?
Some of the characteristics that set this plan apart and make it a valuable joint life insurance product include:
- Your homemaker spouse is also included under the same plan
- The continuing term plan does not need any premium waiver rider.
- It provides terminal illness benefits to the spouse with suitable plan features.
- Within a year of having their first child, the couple can buy this extra add-on protection to their existing policy.
In conclusion, term insurance is an effective tool for financial planning due to its many advantages. If you have dependents, you must safeguard them from any financial catastrophe that may arise while you are away. You can utilize a term plan calculator to estimate the amount of premium you need to pay for the insurance coverage. To protect your family from any unanticipated troubles, term insurance is a must in addition to conventional saving methods. The factor that will have an impact on your dependents’ well-being is the sum assured or term insurance coverage.