When purchasing insurance, whether for health, life, motor, or other needs, policyholders often come across two terms: Standalone and Add-On. Understanding the difference between them is essential for making informed decisions that balance coverage, cost, and flexibility.
Standalone Insurance Products #
A Standalone insurance product is a separate, independent policy designed to cover a specific risk or need. It operates on its own, with its own terms, premium, and benefits.
Key Features #
- Independent Coverage: The policy functions on its own and does not require any other insurance plan to exist.
- Separate Policy Documents: Comes with its own contract, conditions, and renewal terms.
- Customised Sum Insured: You can choose a specific sum insured for that risk.
- Own Premium Structure: Premiums are calculated separately, based on the risk profile.
Advantages #
- Comprehensive coverage for the chosen risk.
- Greater flexibility in selecting coverage amount and features.
- Independence – termination of another policy does not affect it.
Limitations #
- Requires separate premium payments and paperwork.
- It might cost more compared to adding coverage under an existing policy.
Add-On Insurance Products #
An Add-On is an additional coverage benefit purchased in combination with an existing base policy. It cannot be bought or maintained without that base policy.
Key Features #
- Dependent on Base Policy: Coverage exists only alongside the main policy.
- Supplementary Protection: Expands or enhances the base policy’s benefits.
- Cost-Effective: Premiums are generally lower than buying a separate policy.
Advantages #
- Economical way to increase coverage.
- Easier to manage – one premium payment and renewal.
- Flexible – can be added or removed at renewal time.
Limitations #
- Cannot exist without the base policy.
- Benefits are often limited compared to a standalone plan.
Key Differences at a Glance #
| Aspect | Standalone Insurance | Add-On Insurance |
|---|---|---|
| Independence | Works on its own, no base policy needed | Requires an active base policy |
| Premium Payment | Paid separately | Usually added to the base policy’s premium |
| Cost | Usually higher | Generally lower |
| Coverage Depth | Often more comprehensive | Usually supplementary in nature |
How to Choose Between Them #
- Choose Standalone if you want independent, robust coverage for a specific risk or if you don’t already have a base policy in that category.
- Choose Add-Ons if you already have a base policy and want to enhance it cost-effectively without managing multiple separate plans.
Standalone insurance offers complete independence and often broader protection, while add-ons provide a cost-effective way to enhance an existing policy. The right choice depends on your coverage needs, budget, and how much flexibility you want.
