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Joint life insurance

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What is joint life insurance?

Joint life insurance is a life insurance policy that covers two people, but usually only pays out once. The payout goes to the beneficiary if one of the policyholders dies within the term of a policy. After that, there’s no further life cover for the surviving person.

That’s why joint life insurance can often work out cheaper than two people holding separate policies. Joint life insurance is usually best suited to married couples, long-term partners and sometimes business partners.

If you’ve got children, it’s an option to consider too. As a new parent, your child is going to be a long-term dependant, so it’s important to think about how you’d provide for them financially if you or your partner died. 

How does joint life insurance work?

There are two ways a joint life insurance policy can work. Whichever type you choose, you’ll pay one premium between the two of you.

First-death policies

These are the most common – they’re the kind that only pays out once, after the first death. 

If both of you happened to die at the same time (such as in a car accident), your beneficiaries would still only receive one payout. 

You can compare decreasing term first-death policies with us.

Second-death policies

This kind of policy pays out after both policyholders die. Beneficiaries would still only get one payout though. 

It'll usually only be an option of you're taking out whole of life cover (cover for when you die, rather than if). These policies don't have a limit on the term so tend to be more expensive.

We don’t compare second-death policies. But you can compare level term life insurance with two applicants. It’s effectively two policies with the same insurer. So if something happened to both of you, you would both get payouts from your policies.

What could joint life insurance cover?

A payout from a life insurance policy could help cover:

  1. Mortgage repayments

  2. Household bills and everyday expenses

  3. Education fees

  4. Any money you’ve borrowed that you still need to pay back

  5. Any extra money that would help your family if one of you couldn’t be there

Pros and cons of a joint life policy

Pros

Joint cover could be cheaper than two single life cover policies, but that depends on your circumstances.

A payout is due no matter which of you dies first, and you’ll have already arranged who will receive it, which could speed up the payment.

You don’t need to be married to take out joint cover. But if you aren’t, there can be tax implications. You might want to write the policy in trust if that’s the case.

Cons

If your relationship with the other policyholder changes, you might not be able to split the policy. This is also the case if your circumstances change.

There’s only one payout, even if both of you die at the same time.

More life insurance topics

[1]For comparing quotes online, Gocompare.com introduces customers to Neilson. Which is a trading name of Neilson Financial Services Limited who are authorised and regulated by the Financial Conduct Authority no. 594926. Gocompare.com's relationship with Neilson Financial Services Limited is limited to that of a business partnership, no common ownership or control exist between us.

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