A simples guide

Single or joint life insurance cover?

The best things in life often come in twos – like fish and chips and sausages and mash so it’s easy to assume that getting a joint life insurance will work out best too. But it depends on what you mean by ‘best’, so before you sign on the dotted line, find out exactly what having joint life cover means.

What’s the difference between a single and joint policy?

As uncomfortable as conversations about death are, sometimes you just need to tackle the topic head on and know that being practical about it can remove much heartache, worry and uncertainty later on if the worst should happen.

So, here goes – a single life insurance policy covers one person that person is responsible for paying the premiums and if they die whilst the policy is active, any beneficiaries will receive a pay-out. If both a husband and wife have a single policy each, each policy will pay out separately when the policy holder dies. This means two pay-outs – something that might be reassuring for couples with children.

A joint policy will cover two people – in insurance speak this is usually defined as a couple with a recognised, shared financial interest such as married or cohabiting couples.

With a joint policy, you’ll usually have the same level of cover and it’ll work on a ‘first death’ basis and will only pay out once (we know – chirpy conversation this isn’t). So when the first person dies during the policy period then the surviving partner will receive the pay-out. The policy will then end and it’s up to the remaining partner to decide whether they want to set up their own single policy; with this in mind, it’s important to note that insurance premiums can increase as you get older. It’s important to remember that if you have a joint policy and both pass away, your beneficiaries will receive just one pay-out.

Benefits of joint life insurance policies

The main benefit of a joint policy is financial – like splitting the bill in a restaurant, the cost is shared between the two people named on the policy and premiums can be lower on joint policies than having two separate policies. It’s also a lot less hassle from an admin point of view because there’s only one set of paperwork to file and keep check of.

Single or joint life insurance cover?

So, what’s better a single policy or a joint one?

Of course, life insurance shouldn’t be about being lazy with paperwork and scrimping on premiums – it’s about doing what’s best for those you leave behind. So it’s worth taking these points into consideration:

  • You only get one pay out with a joint policy – this might be all you need if it’s just you and your partner, but if you’ve got children, then think about what will happen to them if the worst then happened to you and your partner. Only one pay out would be made and would this be enough to take care of everything?
  • Splitting up –Sadly your policy can’t simply be divided. You would probably have to cancel the existing policy and set up two new ones, if you are older this could result in a higher premium.
  • Amount of cover – you’ll need to consider how much cover you both need, if you both need very different amounts then is a joint policy really the most beneficial or practical?
  • Pre-existing medical conditions – if a condition or illness affects one of you, this might drive up premiums for you both so you may want to consider having separate policies if that will keep the overall cost lower

Deciding what’s best for you

So you see, deciding what’s ‘best’ isn’t always straightforward and when two become one, you can get a whole load of complications, but there are alternatives. You can sign up for two single life insurance policies which will mean dependents will potentially receive two pay-outs; one from the first deceased partner and then eventually another when the second passes away. As we said earlier, having a joint policy will mean your beneficiaries only ever receive one pay out whether one or both of you pass away.

Alternatively, some insurance providers allow you to opt for a joint policy that pays out on the second death rather than the first. This means that if one partner dies before the other, the surviving partner won’t receive anything, but once they both pass away, any beneficiaries will receive a payment. The premiums for second death joint policies can be lower than for the traditional first death equivalents as the chances of a claim are reduced.

Start comparing

Of course the best way to see what works best for you, is to compare the market, we can’t give the gift of immortality but we can present you with choice and value which we think is almost as good – so give yourself some peace of mind and let’s compare.

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