Should Women Get a Group Term Insurance or an Individual Cover Plan?

Written by : Knowledge Centre Team

2021-10-29

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A term insurance policy, based on the policy you select, provides lifetime coverage. The guaranteed death benefit is paid to the nominee in the event that the policyholder dies before the tenure is fulfilled. Low premium rates are a hallmark of the best term insurance plan.

However, it is frequently seen that each family's term insurance policy is only in the name of one working member. Group insurance policies, on the other hand, are becoming more popular today. Females can receive a name in the insurance plan not only as a candidate but also as a policyholder with the best term insurance policy for women.

What is a Group Term Plan and an Individual Term Plan?

Group insurance policies, as the name implies, allow a couple to purchase a term policy with both of them as policyholders. With changing gender roles and the need for coverage for both spouses in nuclear families, combined life insurance plans are a realistic option for ensuring that both spouses are covered under one plan.

An individual insurance plan provides lifetime coverage to the insurer's family, depending on your chosen plan. In an individual plan, one working member of the family is usually the policy owner, and their spouse or child is the beneficiary. A death benefit will be provided if the policyholder dies while the term insurance is active and the insurance is still valid. For the length of the policy, many term plans have fixed premiums.

Also Visit - Online Term Cover

Which of these Plans is Better for Women?

An individual plan offers to hold one person as the policy owner and the spouse as the nominee. However, with a group insurance plan, women can become policyholders along with their spouses.

Unlike individual coverage, group insurance's best term plan names both spouses as nominees and owners. This plan is appropriate for couples in which one partner is unemployed but the other keeps paying premiums without restriction

Working women nowadays are financially self-sufficient and are entitled to the same benefits as their male colleagues. The best term plan for women guarantees that every woman has a policy to protect her family and participate equally.

Another value point of group term insurance vs. individual is that both partners can have one single policy with the same premium instead of buying two different premiums.

Difference between Group Insurance and Individual Insurance

Identifying the key distinctions between an individualized term insurance policy and a standard term insurance plan might help you decide which term insurance plan is best for you.

The following considerations will assist you in understanding the distinctions among group life term insurance policies and standard term insurance policies:

1. Number of Policyholders

The significant indication element is the increase in the number of policyholders of both a combined life term insurance plan and an individual term insurance plan. The joint-life term insurance policy, on the other hand, protects two people, unlike an individual term insurance plan, which only covers one. As a result, another reason why a group policy is the greatest term insurance coverage is because of this.

2. Type of Agreement

Under a standard term insurance policy, the spouses must purchase separate plans with various contract terms. On the other hand, couples or parents, including their children, can acquire a coherent policy agreement with the same user agreement via a joint life term insurance policy.

3. Beneficiary of the Policy

When a term insurance policy's insured dies, the insurance protects the beneficiary or nominee, financially. A shared term insurance plan's death benefit, on the other hand, is paid to the live life guaranteed. As a result, when both insurers of a combination plan pass away, the life insurance proceeds are only paid to a nominee or beneficiary.

Is group insurance better than individual cover?

The ideal term plan for women is group insurance, which has various benefits for the entire family. It encompasses both term insurance and immediate financial advantages.

The family benefits from the group insurance in the following ways:

1. More Affordable Premiums

For some individuals, the expense of obtaining separate insurance for yourself and your spouse might result in a financial strain of multiple premium payments. In this case, of group insurance vs. individual insurance, purchasing mutual life insurance saves money on premiums while also providing more coverage than a single-person policy.

2. Acts as a Breadwinner

In addition to the cash promised as insurance policies, the survivor covered receives monthly mortgage payments. For the insured's nominee, this monthly payment replaces the income of the deceased spouse. As a result, the survivor partner's financial stress is alleviated.

3. Additional Tax Benefits

Premiums payable for a combined term insurance plan are tax-deductible under Section 80C of the Income Tax Department. Furthermore, under Section 10(10D) of the Act, the proceeds received under the plan are tax-free.

Canara HSBC Life Insurance offers the iSelect Smart360 Term Plan that offers long-term benefits to their customers like:

Return of premium
Increasing sum assured
Option to cover the spouse
Limited premium pay option

Clients could include a Joint Life Term Insurance Plan in this plan to cover your spouse, including homemaker partners, in the same plan. Your spouse can be a policyholder and pay the same premiums as you do each year. However, before making an investment, it is prudent to thoroughly investigate the benefits and downsides of any insurance coverage.

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