What’s the difference between stand-alone life insurance policies and linked policies?
Stand-alone life insurance policies are independent, meaning a claim on one policy, such as TPD or trauma insurance, does not affect your other coverages. For example, if you claim $300,000 on a stand-alone TPD policy, your $500,000 life insurance policy remains untouched. This independence offers greater flexibility and peace of mind but comes with higher premiums.
Linked policies, on the other hand, combine multiple types of coverages, such as life insurance and TPD, into one. While more affordable, a claim on one part of the policy reduces the coverage available on the others. For instance, if you claim $300,000 on a linked TPD policy, your life insurance cover of $500,000 would decrease to $200,000. The choice between the two depends on your budget and whether maintaining separate, unaffected coverages is important to you.
