HomeBusinessJoint Life Insurance Vs Individual Policy: Which Is Right For You?

Joint Life Insurance Vs Individual Policy: Which Is Right For You?

A life insurance policy is based on the age, income, health, lifestyle, and any current medical conditions (active or sedentary) of the person who is insured. Joint plans make sure that both spouses are covered jointly, so that in the event that anything were to happen to either spouse, the other would still be able to support the family. In addition to covering a spouse, joint life insurance policies can also cover a kid. Some joint life insurance policies may include coverage for business partners.

Joint life insurance plans come in two different varieties.

  • First death – These joint plans only pay out a certain amount upon the passing of the first spouse; thereafter, the coverage expires.
  • Death of Each Life – These joint policies pay out upon the passing of the first spouse, and the coverage is maintained with a lower premium. On the passing of the second spouse, the insurer will once more pay an amount to the nominee.

When deciding between individual and joint life insurance policies, it’s important to know what is life insurance and to take into account a number of criteria, including cost, terms and conditions, tax benefits, ease of use, flexibility, pay-out, premium waiver benefit, divorce or separation, riders, and benefits at maturity.

Cost Analysis

Joint insurance policies typically have lower initial costs and ongoing rates than two separate individual policies would. You can calculate the cost of the same using a life insurance calculator.

Tax Advantages

Tax advantages are provided to the insured under Section 80C of the Income Tax Act for individual and joint policies. According to Section 10 (10D) of the Income Tax Act, for some life insurance plans, the payout received by the spouse or children is also tax-free. The tax benefit is subject to change in tax laws.

Note: A new tax regime was announced in the Union Budget 2020. Taxpayers can choose to stick with the existing tax regime or choose the new tax regime. Taxpayers will need to ensure that they choose the right system for obtaining the tax advantages of a life insurance policy.

Effortless Use

Depending on the insurance company, individual plans require varying premium payments at various intervals, which can be calculated using a life insurance calculator. However, only one premium must be paid for combined life insurance contracts. Additionally, it is possible to complete the documents for both spouses at once, and extra paperwork is avoided.


The spouse of the Principal Life Assured may find the joint life plans to be a little more restrictive than individual plans, which permit insurance of any amount sought by the policyholder. Individual plans, in contrast, provide you with the freedom to select the level of coverage you want without any restrictions.


Individual life insurance policies automatically payout upon the insured’s passing. Different guidelines apply to joint life policies depending on the type of policy selected. When both insured parties pass away, you are still able to file a claim under a joint “first death” plan for the full amount of coverage. However, the insurance coverage ends after filing a claim. If the surviving person wants their coverage to continue, they must purchase a new plan. In contrast, under the “death of each life” plan, the insurer will pay out upon the passing of each person covered by the policy.

Waiver of Premium Benefit

You do not receive any premium waiver benefits from combined life insurance plans that are individual or “First Death” based. However, the joint life insurance plan known as “Death of Each Life” provides the additional advantage of a premium waiver upon the passing of the first spouse. For the balance of the policy term, no additional premiums are due from the surviving spouse under this policy. They are also given a consistent monthly or annual income based on the entire policy coverage.

Separation or Divorce

Individual life insurance plans are unaffected by a divorce or separation. However, this could become a problem if a combined life insurance policy exists. The coverage cannot be terminated or split between spouses. It remains an individual life insurance policy. The policy will expire if one spouse chooses not to pay their portion of the payment. The other spouse will be required to continue paying for the other spouse in order for the policy to remain in effect. Individual life insurance coverage helps to prevent issues of this nature.


Plans with riders account for catastrophic diseases, disabilities, and accidents. These riders provide a certain amount of medical care. Once more, these differ amongst individual and joint life insurance plans.

Benefits at Plan Maturity

While some life insurance policies only pay out in the case of passing away, others offer extra benefits in the form of a percentage of the Sum Assured for successfully finishing a predetermined term period. This differs for each plan on a case-by-case basis.

While one is learning what is life insurance, there are other factors like the plan’s premium costs, gross payout, sum assured, supplementary benefits, policy duration, surrender values, and claim settlement ratios, that must be chosen wisely.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.


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