Joint life insurance

Joint life insurance is a policy that covers two people but only pays out once. When one of you passes away, it typically gives a lump sum to the survivor.

Joint life insurance could be a cheaper option than two single policies for any couple who financially support each other in some way, including:

• Married couples

• Long-term partners

• Business partners

A joint life insurance policy only pays out once, and its timing depends on how your policy is set up:

• 'First death' policies – a payout is made when one of you dies. The surviving partner is then no longer covered. Most insurers only offer this type of joint policy.

• 'Second death' policies – a payout is made only after both of you have died, if payments are up to date. 

If both people insured died at the same time, the policy would still usually pay out once, with the money going to the appropriate beneficiary depending on how the policy was arranged.

A joint life insurance policy can give your partner and dependants with a financial safety net. The payout can be used for whatever they choose.

Many couples take out joint life insurance to cover: 

• Mortgage payments 

• Household bills 

• Childcare costs and education fees 

• Outstanding loans 

• Funeral costs.

How much cover you need depends on your budget and the costs your loved ones would face if you one of you died.

Not sure which route suits you? Here's how the two compare.

Some couples use both types of cover – a joint policy for the mortgage, plus single cover for individual needs.

A joint policy typically works out cheaper at £64 a month, compared with £73 for two single policies¹. But with two separate policies, if one of you were to die, the surviving partner would still have their own cover.

Yes, critical illness cover can be added to a joint policy. Critical illness cover is an optional add-on that can pay out a tax-free lump sum if you’re diagnosed with a serious illness covered by your policy.

But there are a couple of things to watch out for:  

• It usually can only be claimed once between you. If one of you makes a critical illness claim, the other person will no longer be covered for it 

• Be aware of ‘combined’ life insurance and critical illness policies. Once a claim for critical illness has been made, your joint life insurance policy will typically end for both of you. 

Ben and his wife, both in their late 30s, live in Cambridgeshire with their two children under seven. They have a £260,000 repayment mortgage over 33 years and no existing cover.

They want a policy that would clear the mortgage if either of them died, plus extra financial support if one of them became seriously ill. Ben gets 12 months’ sick pay through work, but is unsure what benefits his wife receives.

After speaking to an insurance adviser, they choose joint decreasing life insurance to help pay off the mortgage if either of them dies.

They also add a smaller combined life and critical illness policy to help with household bills, funeral costs or medical expenses if either of them dies or develops a covered critical illness.

Some things don’t usually affect the price of your premium directly but may still influence how much cover you choose or how your application is assessed.

• Whether you're married - You don't usually need to be married or in a civil partnership. Long-term partners, friends with shared financial commitments and business partners can apply too. 

• Who earns more - Your income can influence how much cover you choose to take out, but it isn't usually used to price the policy. 

• Whether you have children - Having a family could mean you want more cover. But the number of children you have isn't usually a pricing factor on its own. 

• Who gets the payout - Naming a beneficiary, or writing your policy in trust, doesn't usually change what you pay each month. 

• Your gender - Insurers can't usually price life insurance differently for men and women. Gender-neutral pricing has applied across UK insurance since December 2012. 

• Your credit score - Life insurance isn't usually credit-scored the way borrowing is, so a lower score shouldn't push up your premium.