Joint vs Single Term Insurance Plan – Which Is Best for You?

What Is Single Term Insurance?

What Is Joint Term insurance?

What Are the Differences Between Single and Joint Term insurance?

Couples need expert clarification when choosing between single and joint term insurance, especially if they are a first-timer in the life insurance buying journey.

Let us analyse the various parameters of both, single vs joint term insurance.

Parameter

Single Term Insurance

Joint Term Insurance

Number of Contracts

In single term insurance, each partner can choose life coverage based on their needs.

Joint term insurance plans protect spouses under one contract depending on a single set of conditions.

Sum Assured

Single term insurance plans offer variable life coverage to individual partners.

Couples can choose a joint term plan if they own a liability, such as a joint mortgage where cash disbursements must be done twice.

Premium Cost

Premium rates for two single term insurance policies will always be higher than a joint term plan, no matter how affordable quotes are offered by an insurer.

Couples and business partners seeking a long-term cost-saving insurance option readily choose a joint term plan.

Coverage Duration

The length of the policy term is at the discretion of individual partners if they go for single term insurance plans.

The duration must be mutually agreed upon if they buy a joint term insurance policy together.

Which Is Better - Single or Joint Term Insurance?

FAQs about Joint Vs. Single Term Insurance Plan

How is the death benefit calculated in a joint term plan? up-arrow

Assume Mr. and Mrs. Gokhale buy a joint term plan ensuring a combined sum of Rs. 1 Crore. If Mr. Gokhale, the family's sole earner, meets his demise within the policy term, Mrs. Gokhale will receive the entire assured amount, i.e., Rs. 1 Crore. It is because she was otherwise entitled to Rs. 50 Lakhs in her case. On the other hand, if Mrs. Gokhale, the dependent (in this case), dies within the term, then her husband will receive half of the insurance money.

What happens to a joint-term insurance policy in case of divorce? up-arrow

Ex-couples can hold a joint term insurance policy and will be entitled to the death benefit even if they live separately, followed by a divorce. Only the policyholder can modify the particulars of a term plan or take the decision to discontinue; thus, it continues to exist.

Who can purchase joint term insurance? up-arrow

Apart from married couples, business partners and unmarried couples also purchase joint term plans to benefit from them. Financial experts suggest owning one joint term plan to ensure that if there are any liabilities, they can be easily paid in case the primary policyholder dies within the insured period.