What Is Better – Individual Term Insurance or Joint Term Insurance
You must have always considered getting individual term insurance for yourself. But were you aware of joint term insurance that secures you and your spouse? After getting married, it’s natural to consider getting insurance to secure your spouse and children. With various expenses that every relationship encounters, you would want your partner to have some financial support in case something happened to you. So, let’s understand the difference between the two plans and which one is better for you.
Individual Term Insurance
Term insurance is a policy that protects your loved ones if something were to happen to you by offering them financial support. To secure a term plan, you have to pay a set amount of premium periodically for a fixed tenure. You can ensure yourself at affordable premiums with high sum assured. Term insurance also offers insurance riders to increase your coverage. By investing in individual term insurance, you can claim the premiums paid towards the plan under Section 80C for income tax deductions. Your beneficiary will be able to get the death benefit as tax-free under Section 10(10D).
Joint Term Insurance
A joint term plan is an insurance policy that secures you and your spouse from an untoward incident. The beneficiaries of the plan are both the individuals. If one were to pass away, the spouse would get the sum assured, and the policy would expire. Rider benefits can also be added to maximize the coverage you and your spouse get. The death benefit can be availed as a regular income instead of a lump sum payout. Joint term insurance gives you similar tax benefits as an individual term plan under Section 80C and 10(10D).
Difference between Both Plans
Joint term insurance safeguards both partners, whereas you would have to buy two individual plans for you and your spouse. While comparing the pricing, the joint plan is much cheaper than two individual plans. But if you were to divorce your spouse, there would be no method to split the joint policy. With an individual plan, you would not face that problem and would be able to change the beneficiary in case you split.
What Should You Opt For?
Joint Plan enables you to get a cheaper plan but doesn’t allow you to customize it individually. You and your partner may have different requirements and may need a personalized plan. With individual policies, you can customize and pick the sum assured, tenure, premium payment frequency, and rider benefits. Another drawback is that once the plan has paid out, you no longer have a life cover. So, if something were to happen to you as well, you would have no cover and to secure your dependents, you would need another term plan. Hence, if you and your spouse can afford two separate plans, then you should opt for it. But if you cannot, then a joint plan is beneficial as well.