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Ref. No. KLI/22-23/E-BB/492
Joint term insurance and individual term insurance are two different types of policies that provide coverage for a set period of time. The main difference between the two is that joint term insurance covers two people, while individual term insurance only
When it comes to protecting your loved ones, term insurance is a popular and affordable option. But did you know that there are two types of term insurance, joint and individual?
Both types of insurance offer coverage for a specific term, but there are some key differences between the two that you should be aware of before making a decision.
A joint term insurance plan is a type of insurance that covers two people, usually a married couple or domestic partners. The policy is purchased by two individuals or partners, and the death benefit is paid out to the surviving partner when one of the partners dies.
Term insurance is a cost-effective approach to provide your family with a sizable corpus regardless of what the future holds. The family can continue to exist, and the kids can pursue their education as you had envisioned and planned. But which one should the policyholder opt for: Joint or Individual? Here is how one differs from the another.
for: Joint or Individual? Here is how one differs from the another.
Category |
Joint Life Insurance |
Individual Term Insurance |
Coverage |
One insurance policy provides coverage for both partners. |
Each partner adopts a different approach. |
Loss of one Guaranteed Partner |
The sum assured goes to the surviving partner according to the selected plan. Depending on the type of plan selected, the policy may continue. |
The nominees listed in the insurance will receive the full total insured amount, after which the policy expires. |
Separation |
The insurer must be contacted in the event of a divorce to determine whether the insurance can be divided or kept. |
There is no difference if both partners have chosen separate term plans. If the spouse has been designated as the nominee under the policy, the only adjustment that may be necessary for this situation is for the nominee’s details. |
Death of both partners |
The joint life term plan’s lawful heir will be given the sum insured amount if both partners have passed away. |
If both partners have individual policies, the legal successor designated in each policy will receive the sum assured payout if both partners have individual policies. |
Sum Assured |
The annual income of the policyholders is used to determine the total sum guaranteed. The same conditions typically apply to both parties. |
The amount insured is determined using the policyholder’s yearly income. |
The type of term insurance that is best for you depends on your circumstances. If you are married, a joint term insurance policy can be a cost-effective option as it covers both you and your spouse, with a single premium and a shared death benefit. On the other hand, individual term insurance policies can be a good option for single individuals or if you want to have separate policies for each spouse.
Both joint-term insurance plans and individual-term policies have their own set of advantages and disadvantages. Here’s how to choose:
Additionally, individual policies offer more tax benefits than joint policies. Ultimately, the decision of whether to choose a joint term insurance plan or an individual term policy will depend on your specific needs and circumstances. It’s recommended to consult a financial advisor before making a decision, who can help you evaluate your options and choose the best policy for your needs.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Features
Ref. No. KLI/22-23/E-BB/2435
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
