What is joint life insurance?
Joint life insurance is a life insurance policy that covers two people, but it only pays out once. Typically, this payment will be a lump sum, which goes to the survivor after the first person dies within the term of a policy. When the policy ends, there’s no further life cover for the survivor.
Joint life insurance could be a cheaper option than two single policies for:
- married couples
- long-term partners
- business partners
How does joint life insurance work?
A joint life insurance policy only pays out once, so it depends on how your policy is set up.
- First death policies - a pay-out happens after the first death in a couple. After that, the other person will no longer be covered.
- Second death policies - a pay-out is made only after both people have passed away (as long as the premiums have been paid).
If the worst happened and you both died at the same time – for example, in a car accident – any dependants would receive one lump sum payment from a joint policy.
What types of joint cover are there?
Just like a single life policy, there are three main types of joint cover:
- Level term life insurance - a cash sum is paid out if you die before the policy ends.
- Whole of life cover - this policy lasts until you die and will pay out no matter when that happens.
- Decreasing term - the pay-out decreases over time. It’s often taken out to cover the decreasing amount needed to pay off a repayment mortgage.
The type of policy that works best for you will depend on your individual circumstances, like your mortgage situation or whether you have more than one child.
Frequently asked questions
How is joint life insurance different to single life insurance cover?
A single life insurance policy covers one person, while a joint policy typically covers two people. If you’re in a couple, then you might decide to have two separate (single) life policies. This could offer you greater peace of mind because if one of you were to pass away, then the surviving person would still have their own cover.
What are the benefits of getting a joint life insurance policy?
One benefit could be the cost. A joint life policy might be cheaper than two single life cover policies, but again that will depend on your circumstances. You should think about whether both of you have the same need for life insurance. If only one of you works, ask yourself if you both need to be insured for the same amount.
A joint life policy could be an option to cover the mortgage repayments after the death of one of the people covered. However, it’s likely that you’ll need additional cover to meet any loss of income, household and living expenses, childcare costs and so on.
Another benefit of joint life insurance is that because you’ve already arranged who will receive the pay-out if the worst were to happen, this could speed up the payment to the surviving partner. On the other hand, any pre-existing medical conditions or illness that affects one of you could drive up premiums for you both.
Ben's case study
Ben and his wife are from Cambridgeshire and have two children under 7 and a new repayment mortgage of £260,000 over 33 years. The couple are in their late 30s, work full-time and have no existing cover, but want the mortgage cleared if either of them were to die. They also want some additional support towards the cost of raising the children or a short-term cash injection if they were to be seriously ill.
Ben has 12 months’ sick pay via his employer but isn’t clear on his wife’s employee work benefits. They need their solution to be affordable as well as providing support at the worst possible time.
After discussing various options with their advisor, Ben and his wife agree on joint decreasing life cover to clear their current mortgage if either of them die. Plus, a smaller, additional, combined life and critical illness policy to contribute towards household bills, funeral or medical expenses (dependent on their circumstances) if either of them pass away or suffer an insured critical illness.
What are the drawbacks of joint life cover?
A joint policy will only pay out once, whereas two separate policies will each pay out individually.
Should I buy joint or single life insurance?
It depends on your situation. Joint life insurance can be cheaper than taking out two separate single policies but, should you break up as a couple, the policy can’t be divided or replaced. So any premiums you’ve been paying are effectively lost.
Joint life insurance is likely to be more suitable for couples who have made a financial commitment already. If you own a home together, a joint life insurance policy can pay off the mortgage for the survivor, no matter which one of you dies first.
Single life insurance policies offer you greater flexibility, with the ability to choose, change and add beneficiaries, but typically come at a greater cost. How highly you value that flexibility will likely be a key factor in choosing a joint or single life insurance policy.
Two single policies might also work better if one of you:
- has a pre-existing medical condition
- has a high-risk job
- takes part in extreme sports.
Any of the above can push up the cost of your joint cover, so two separate policies could work out cheaper.
How much cover do we need?
That’s a personal choice and will depend on a number of factors including: what you can afford to pay, your marital status as a couple and what your family would need if the worst were to happen to one of you. It could take just a minute to complete our easy-to-use life insurance calculator, which is a great starting point for working out what’s best for you.
Why should new parents think about joint life cover?
With all the joy that comes with a new arrival is an understanding that you have the responsibility of a dependant whose long-term future you’ll need to secure. Start by considering what costs will be left for your family to cover in your absence – taking into account the outstanding balance on your mortgage, credit card debts or other bills, like childcare – and what financial sum would be needed to relieve those costs.
How long does a joint policy last?
Unless it’s whole of life cover, an insurance policy is set for a fixed amount of time, say 10 or 25 years. This amount of time is known as the ‘term’, which simply means how long the policy lasts for.
There are two main kinds of term insurance to choose from: level-term life insurance or decreasing term. How much you’ll pay will depend on many factors, including whether you’d like the cover amount to stay the same throughout the life of the policy or to decrease over time.
Learn more about how to decide on the term of a life insurance policy.
What happens if a couple with a joint policy divorces or separates?
When it comes to a joint policy, if you were to split up with your partner then your joint life insurance policy can’t be divided. In that situation, you’ll probably need to cancel the existing policy and set up two new ones. As you’ll be applying for a new policy at a later stage in your life, this could result in a higher premium. However, it will also give you each the chance to review your needs to see if a new policy would better reflect your changed circumstances: for example, if you have a smaller mortgage or reduced expenses.
Where can I get a quote for life insurance?
Let us help you find the right life insurance cover for you. It takes just a few minutes to get a list of quotes from our panel of providers. So why not get a quote to see if you can save?
What do I need to get a quote?
To get a joint life insurance quote, we’ll need some details about you both, including:
- date of birth
- lifestyle habits (if you smoke or drink)
- how long you want the cover for
- the type of cover you want.
You’ll also be able to choose any optional extras you’d like to add, such as critical illness cover.
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**Correct as of March, 2022.
^For the period 1st June to 31st August 2021, 8944 people responded to the recommend question. 8,226 responded with a score of 6 or above, therefore 92.0% are likely to recommend.
What our expert says...
“Think carefully about taking out joint life insurance. Should something happen to one person in the couple, the policy will pay out and then come to an end – leaving the surviving person uninsured. This often happens at an age where the surviving person is older and perhaps not in good health, making the cost of replacing that cover either expensive or impossible.”
- Kara Gammell, Finances expert