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Joint life insurance is a policy taken out by two people, typically a couple, that pays out upon the death of the first policyholder during the term.
After the payout, the policy ends and doesn't cover the surviving partner. You can have joint policies for all the different types of term insurance - find out more about the best life insurance policies.
A couple might have a joint decreasing term policy to cover their mortgage and a joint level or increasing term policy to ensure a lump sum for family support if one parent dies.
Some joint life insurance policies include a terminal illness clause, allowing for a payout if one policyholder is diagnosed with a terminal illness and given less than 12 months to live. This allows you to put your affairs in order. You do not have to pay any back if you outlive the doctors’ expectations.
Find the right life insurance policy using the service provided by LifeSearch.
Find out moreCouples and friends often get life insurance when they have commitments together, such as family or a mortgage.
Life insurance pays out if the insured person dies while the insurance is in place. There are two main types of life insurance:
You can receive a lump sum or get a monthly payment – called family income cover.
We examine how joint life insurance works and whether a joint policy or two single life insurance policies might be best.
Read up on what are the different types of life insurance?
The main disadvantage of joint life insurance is that you will get only the single payment per policy, even if the worst were to happen and both of you died during the term of the policy.
If you had two single policies, the insurer would pay out on both. With all other risks the same, the discount for a joint policy is often small.
If you get quotes for single policies and a joint policy and the difference is marginal, it might be worth considering single policies.
If the worst-case scenario happened and you were both killed in car crash, for example, your family would receive twice as much money from two single policies than from a joint policy.
It's also worth considering that not all relationships last the test of time. Splits happen among unmarried couples, too.
With single life insurance, each person could carry on paying their own policy and move on.
Dean Sobers, Which? insurance expert says:
'If you’re married or live with a partner, you might consider buying a joint life insurance policy to cover you both. These come with their perks - the chief one being they’re often (slightly) cheaper than buying two individual policies. They also make for less paperwork, and will pay out the same amount should either partner die.
But don’t assume they represent twice the value. In fact, the reverse is closer to being true. Most joint policies will only pay out once, which means you’re effectively sharing - rather than combining - cover. If the surviving partner wants to continue being covered, they’ll need to reapply for a new policy.
So before taking out joint cover, it’s worth checking how much of a saving this would actually make over both of you buying separate insurance. If the gap isn’t that big, this may be the better option.'
Single person life insurance covers just the individual insured. It will pay out on your death or, often, if you receive a diagnosis that you have a terminal illness and will die within 12 months.
The premium is calculated based on three factors:
You can also set up your life insurance in trust, which ensures it is not added to the value of your estate and subject to inheritance tax. This may also grant access to the funds faster.
Imagine a couple with a mortgage and children took out decreasing life insurance to cover the mortgage and level term life insurance for a further £250,000.
Then imagine both were killed in a car crash when the mortgage still had £250,000 owing. Here's how the payouts compare:
The mortgage would be paid off and the children would get £250,000.
The mortgage would be paid off and the children would get £750,000.
Find out more and get advice on life insurance using the service provided by LifeSearch. Discover more.
In March 2023, LifeSearch ran some quotes based on a couple, both 32 years old, both non-smokers, looking at level cover paying out £250,000 over a 25-year term.
That means that for an extra 54p a month, a family would receive an extra £250,000 if both parents died. You pay less than 3% extra to get 100% more potential benefit.
Each individual and couple would need to look at the costs and benefits of joint or single life insurance policies and decide which was best for them in their specific circumstances. But this is a major life decision, so it may be prudent to seek professional advice.
After a divorce, joint life insurance policies usually need to be cancelled because they are designed for policyholders living at the same address.
Some insurers allow you to split a joint policy into individual ones with the ‘separation benefit’, but this usually isn’t included in a policy. Check with your insurer to confirm this.
One option is that you let one person take over the joint life insurance policy. In this case, both must agree, contact the insurer, and sign a legal document. The person taking over will pay the premiums and choose the beneficiaries. If you have kids, put the policy in trust to avoid legal issues. The other person needs to get a new policy.
Or, you can cancel the joint policy and each get your own. Some insurers need both to agree to cancel, so check first. Cancelling without telling your ex-wife or husband can leave them uninsured.
Make sure new policies are in place before cancelling the joint one. It’s worth comparing new quotes since premiums might be higher if you’re older or have health issues.
Yes, you can get joint life insurance even if you’re not married.
Many insurers offer joint policies for couples who live together or are in a civil partnership. This type of policy covers both people under one plan, providing financial protection regardless of marital status.
Check with the insurer for any specific requirements.
If you're looking to buy joint life insurance, keep the following in mind:
There is a slightly different policy called dual life insurance, sometimes called joint life second death insurance, which pays out only if and when the second person dies during the term of the policy.
Dual life insurance policies are usually reserved for people using life insurance to cover a large inheritance tax bill.
It pays out when both people have died and the payout is usually used to cover inheritance tax paid on the estate as it passed on to family members or friends.
There are many different options with term insurance:
Joint and single life insurance policies may have critical illness cover (CIC) added to them, or you can buy critical illness cover as a standalone policy.
CIC pays out if you are diagnosed with one of a list of 100 or more diseases or conditions. Different insurers take different views on the severity required before payments are made. You may be best off seeking expert advice.
A combined life and critical illness policy will also reduce the final amount paid out on death if money has already been paid for critical illness.
Separate policies would leave the amount paid out on death unaffected.
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