If you are married or have a long-term partner and have been weighing up your life insurance and protection options, you might be considering taking out a joint life insurance policy together.

This is a unique type of life insurance policy that covers you both at the same time, and it comes with the significant benefit of cheaper premiums – but it’s not without some downsides as well.

Here, we’ll discuss the pros and cons of joint life insurance to help you decide whether it might be the right choice for you and your partner, or whether you may be better off going for two separate single policies.

What is joint life insurance?

A joint life insurance policy is essentially what it sounds like – instead of paying for two separate policies, you pay for one that covers you both. This means that you jointly pay premiums every month or year until one of you dies, at which point the policy pays out to the surviving partner. The pay-out is usually the same, no matter who dies first.

Alternatively, you can opt for a ‘second death’ policy, where the money is paid out only when both of you have died, usually to a chosen beneficiary or perhaps a charity.

Like any kind of life insurance policy, the exact premiums you pay will depend on you and your partner’s ages, health and lifestyles, so if you are both younger and lead healthy lifestyles, then your premiums will come to less overall. Your jobs also play a factor – if you’re in an occupation that’s considered high risk, for example, you’re a builder, then your premiums will be higher as well, and vice versa.

Is joint life insurance worth it?

Generally speaking, the premiums you pay for one joint life insurance policy will be cheaper than the combined premiums for two separate policies, as there will only be one pay-out rather than two, either for the first death or the second death.

It is also usually easier to make a claim on a joint policy than a single one, provided it is a first death policy, because when one of you dies, the money goes straight to the surviving partner. On a single policy the money is usually paid into the estate of the deceased, meaning it can take longer for their loved ones to access it, and there may be Inheritance Tax to pay on it.

However, the main downside of taking out a joint life insurance policy is that it will only pay out once, either when the first partner or both partners have died, depending on whether you get a first or second death policy – but it won’t pay out both times.

This means that if your partner dies and you still need life insurance, for children or other dependents, for example, you’ll need to take out a new single life insurance policy. You’ll be older when this happens too, meaning your premiums will be higher.

However, there are some situations where opting for joint cover could be more advantageous. For example, if you and your partner have a mortgage or other kind of loan that you both contribute to financially, it could make sense to have a joint policy in place that could help the surviving partner keep repayments up or pay off the remainder in full if one of you dies.

The cheaper price tag also means that it can make sense to share a policy if one of you would be particularly expensive to insure under a single policy for some reason – such as being a smoker, in poor health, having a high income or having a risky job or hobby. This will still be more expensive than getting single cover for the “low-risk” partner, but cheaper than a single policy for the “high-risk” partner. It’s the same sort of idea as adding an older driver as a named driver on a young driver’s insurance policy for cheaper premiums.

So, even if you are married or in a long-term relationship, that doesn’t necessarily mean that joint life insurance is the right answer for you as a couple. It all depends on your finances both individually and as a couple, your health and lifestyle, and many other factors. Think about your reasons for taking out life insurance and whether it might be more beneficial for just one of you to take out a policy – or if joint cover is the better way to go.

Do you need to be married to get joint life insurance?

While joint life cover is most common among married couples and long-term partners, there’s no rule that says you need to be in a relationship to take out a joint policy with someone.

A joint policy can cover any two people whose finances may be intertwined in some way, such as business partners, for example.

Can you separate joint life insurance if the relationship ends?

Most providers will not let you split up your joint life insurance or change it to a single policy if your relationship ends, though you should check the policy small print just in case.

However, if your relationship has ended amicably, you may decide to continue with the policy, splitting the cost of premiums equally. If you cancel it after your relationship ends after several years of paying for joint life insurance, you will essentially have wasted your premiums, so it’s worth bearing this in mind if you’re considering joint cover.

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What are the alternatives to life insurance?

If you are not sure about joint life insurance or just want to explore some other options, our article What are the different types of life insurance? details the various kinds of life insurance out there so you can see if there is a type you would prefer.

It’s always a good idea, before committing to any kind of life cover, to find out what kind of protection you might have in place already in the event of illness or death, such as through your job. You can read more about this in our article Am I protected financially?

If you want to cover yourself or your partner in the event of becoming unable to work due to illness or injury, you could consider looking into income protection instead – you can read more about how this works in our article Income protection explained.

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