No-one likes to think of the worst, especially when it comes to losing those we love most. That’s why taking out life insurance is not a cheerful subject, but it’s an important one. Married or unmarried couples may wish to look into a joint life insurance policy to ensure that if one of you passes away, the other will be financially supported. Here are a few things to consider…
1. Joint policy, single application.
You only need to do one application between you.
2. It only pays out once.
A joint life insurance policy will usually pay out when one of the partners dies (or is diagnosed with a terminal illness with less than a year to live). The lump sum would be the same if both partners died at the same time, whereas if the partners had two single policies each policy would pay out separately.
3. It’s usually cheaper to take out a joint policy than two single ones.
A joint policy is usually cheaper than two separate policies, as it only pays out once. Plus, the world of insurance operates in a world of statistics, and statistically married or co-habiting people live for longer than single people – this may also be reflected in the lower price of a joint policy.
4. Joint policy, single premium.
It will be one policy, which means one monthly payment instead of two separate direct debits.
5. Once one partner dies, the remaining partner’s cover usually ends.
Once the policy has paid out for one partner, the policy will usually end. This means the surviving half of the couple will be uninsured. So, if you wish to get new cover it will be a fresh application for a new single policy. This can lead to higher premiums if you have any new health conditions or have aged significantly since you last took out life insurance. If you still have young children, it may be worth looking at individual policies.
6. Equally valued.
Partners have to be insured for the same amount, so the same value would be paid out regardless of who passed away first.
7. What if you split up?
We like to assume our one is the one, but it’s worth noting that most policies can’t be split if your relationship ends.
8. It’s worth comparing quotes.
It is worth comparing quotes for joint policies with separate policies, particularly if one partner is deemed ‘higher risk’ than the other, for example if one of you is much older, has a pre-existing health condition or is a heavy smoker.
9. A level term policy usually means a fixed premium and a fixed pay out.
If you opt for a level term joint life insurance policy, the benefit will stay the same throughout the term of the policy, no matter when it is paid out.
10. A decreasing term policy may be worth exploring if your main concern is protecting your mortgage repayment.
A decreasing term life insurance policy often comes with cheaper premiums, because the amount paid out decreases over time in line with your outstanding mortgage debt. The idea behind this policy type is that if one partner passes away before your mortgage is paid off, the benefit can be used to cover repayments. The policy usually ends when the debt has been repaid.
Ready to find out which plans are available for you and your partner and apply online? For more info head over to our life insurance page.