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.