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Joint Term Insurance or Individual Term Insurance - Which is Best and Why?

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March 18, 2019

These days, many insurers offer joint insurance schemes for the benefit of a couple. Such joint insurance schemes work like the single-coverage insurance schemes, with the difference being primarily in the fact that dual coverage offered comes with different premium rates and/or terms and conditions. Generally speaking, joint insurance policies offer more extensive benefits than single coverage ones. So, what are joint life insurance schemes? At the outset, joint life insurance policies are designed to cover couples or partnerships in the event of either partner's death.

How joint insurance policies score over single coverage ones can be understood by considering this: insurance implies that your loved ones do not have to suffer financially in the event of your death. A single coverage policy in a family covers one person (usually the one who pays the premium or supports her/his spouse financially). However no coverage is provided to the other partner, who may be a homemaker or may have the responsibility of bringing up the children. This coverage becomes irrelevant when (as is mostly the case today) both the partners are working and are financially independent. Most families in India today are nuclear, with both the partners being salaried professionals or in any case, having separate income sources. As such, any loss of income (due to the death of a partner) can adversely impact the financial future of the entire family.

A joint-life policy supports the dual coverage factor that goes with the requirements of a couple and as such, there is the advantage of extended coverage. However, the pay-out is restricted to the entitlement to death benefits (i.e. sum assured) in the event of the demise of the policy holder or her/his spouse. The coverage ends with and therefore, even though the terms of coverage are broad, yet when it comes to entitlement to the actual benefits, there is no such coverage. So, if the surviving partner needs to find new life insurance later in life, it's likely to be more expensive because they're older. Moreover, if they have suffered any health or medical problems since the original cover was set up, this will increase the premiums further.

Besides, taking out two separate policies proves to be costlier in the long run. A joint cover, due to non-variation of different premiums (in single coverage for two partners) is far cheaper. Then there are chances of additional tax savings, when considered from the perspective of family budget. Instead of two separate and mutually unrelated policies (along with tax options and offered deductions), taking out a joint policy is far more beneficial, especially for young couples who intend to save money on premiums. Furthermore, regardless of which partner dies, the payout is ensured. Therefore, the children or the dependents have a better chance of financial inclusion and security.

HDFC Life offers numerous insurance plans that are aimed at financial security of your loved ones. For further details, kindly click on the mentioned link:  https://www.hdfclife.com/life-insurance-plans.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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