It might seem obvious if you are in a relationship to take out a joint policy, but this is not necessarily the best option. Here we have differentiated both the policies. So, you can have a better understanding of both the terms.

What is a Joint Life insurance policy?

A joint life insurance policy offers the opportunity to cover oneself along with spouse under one contract. “This is a comprehensive protection plan with multiple benefits for you and your spouse. If either of you is not there, It ensures that the future of your family is secured.

What is an individual life insurance policy?

Individual life insurance generally is underwritten by taking into account the actuarial risk of death of the one individual being insured, a one-person-one-policy type of coverage.

The few factors that must be considered while choosing between an individual and joint-life insurance covers are:

  • Terms and conditions
  • Cost pricing
  • Benefits of Maturity,
  • Riders, Divorce or separation,
  • Pay-out,
  • Flexibility,
  • Tax benefits,
  • Premium Waiver benefit

A single policy or joint life insurance plan?

Before deciding whether a single or a joint life insurance policy is right for your situation, it’s important to understand the differences between these two kinds of plans.

In case you opt for joint life cover, then you and a partner will be protected by a single plan on the same terms and conditions. But if you take out two policies, these will be entirely separate. That means, if a claim is made on one, it will have no impact on the other.

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Single policy Benefits

  • It is not often considered to have two single policies by people in relationships with the same dependents but there are some clear advantages to having your life insurance set up in this way.
  • Having two separate life insurance policies as a couple is a fact that if you claim on one of the policies, the other one remains intact. This means that even if one of you should die, the other will be able to remain covered without having to take out a new plan at increased rates.
  • Another benefit of taking out more than one policy is the fact that there will be two payouts. This means that you can probably expect the sum paid out to be higher than it would be if you were on a joint plan.
  • Having two policies also allows you to ensure different amounts for each person. This means that if one of you is the main source of income, you can ensure a larger sum on your plan. This is because your family will suffer a higher financial shortfall if you are the one who passes away.

Downsides of Joint life insurance Policies

  • One thing that people must remember while taking out a joint life insurance policy is that there will only be one sum paid out. It means that both policyholders were to die at once, there would only be one payout for the two of them. This means that the amount paid is normally lower for a joint policy than it would be for two policies.
  • Joint policies work on a “first death” basis, this means that the plan will only payout on the first person to die. As a result of this, the remaining person will no longer be covered and it will undoubtedly be much more expensive for them to take out a new plan due to their increased age.
  • Another problem with joint policies is that once you sign up for one, you can’t get any of the money back if you want to cancel the policy. This means that if your relationship breaks down and you end up separating from your partner, you will lose all the money that you have paid for the plan.
  • The policy can’t be “split” down the middle. However, if you have two separate policies, neither will be affected in the event of a split with your other half.

It is important that you financially protect your loved ones, Whether you opt for a joint policy or the option of two single policies

Typically, married couples take up a joint life insurance cover. However, research shows that the population of single people has steadily increased from 2002 to 2017.

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