Joint life insurance is a life insurance policy that covers two people, but usually only pays out once. The payout goes to the survivor if the other policyholder 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.
There are two ways a joint life insurance policy can work. Whichever type you choose, you’ll pay one monthly premium between the two of you.
You’ll usually find joint policies have a fixed term - between 10 and 25 years - unlike individual life insurance policies where you decide how long you're covered for.
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.
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.
A payout from a life insurance policy could help cover:
Household bills and everyday expenses
Any money you’ve borrowed that you still need to pay back
Any extra money that would help your family if one of you couldn’t be there
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 of a tax-free payout.
You don’t need to be married to take out joint cover.
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.
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