Joint Life Insurance is designed for couples, whether married or not. Both people in a relationship are covered by the same policy, involving one application and one regular payment per couple. With joint life insurance, partners are insured for the same amount, so the payout is the same whoever dies.

This can sometimes be more economical than buying two separate single policies. This type of policy only pays out once, so the sum assured must be enough to cover at least the total outstanding mortgage amount. You can choose to add any additional cover to be used for bills and expenses plus any extra money you want for your family. If one of you passes away during the term, the sum assured is paid to the other. The policy will automatically end after the payout. If both of you pass away at the same time, the money is usually added to your estate, unless you’ve written the policy in trust. The lump sum will then be paid to your chosen beneficiaries straight from the provider, tax free and avoiding lawyers and probate.

Types of joint life Insurance

First Death – This is the most common form of joint life insurance. The policy will pay out on the death of the first person while the insurance policy is running.

Second Death – This only pays out once both people have died. They tend to be used for inheritance tax planning purposes.

 What happens if your relationship ends?

Some policies now offer a separation option, meaning the policy can be split and continue without either policyholder having to go through underwriting. 

Joint life insurance can be a great choice for some couples, but it isn’t for everyone. A joint policy tends to be less expensive than two individual policies, so could be better for those on a budget. It is a good option if one partner is unable to qualify for their own life insurance policy. Although, check with your adviser as underwriting will take into account the health and lifestyle of both parties so it could cost just as much if one spouse has high-risk medical issues.

It is always important to understand if a policy meets your needs, that why we have advisers to hand.

Book a call with one of our trusted advisers.