Everyone at some point worries about what might happen to their loved ones if anything happens to them. Life insurance happens to be one of the most popular ways of protecting your loved ones in the event of your death, but did you know you can technically share a policy?
Joint life insurance can be used by couples to cover shared responsibilities, but is it really worth it? We’ll explain how it works and how it can benefit couples in particular.
How joint life insurance works
Joint life insurance covers two people under one policy. It either pays out after the first death (which is the most common option) or after the second death, depending on the type of policy you choose.
Once the payout has been made on a first-death policy, the cover ends, meaning the surviving partner would need to take out a new policy if they still want protection.
It’s often easy to manage and usually cheaper than buying two separate policies, which is why many couples consider it.
Who needs joint life insurance?
Joint life insurance isn’t just for married couples; it can suit any two people who share financial responsibilities. It’s particularly useful for couples with a mortgage or shared rent, where both incomes are relied on to cover the home. Parents with children or dependants can also benefit, as a joint policy helps ensure the family has financial support if one partner dies.
Couples who share debts or loans, such as credit cards, car finance, or personal loans, may find joint cover helps prevent these repayments from becoming unmanageable. It’s also worth considering for unmarried partners, who don’t automatically inherit each other’s assets, giving extra peace of mind if the worst happens.
Why do couples need joint life insurance?
There are a number of ways couples can benefit from having joint cover, including:
To protect shared financial commitments
Most couples share big responsibilities like a mortgage, rent, loans, or household bills. Joint cover ensures that if one partner dies, the other isn’t left struggling to keep up with these costs on a single income.
To make sure their family is supported
If you have children or dependents, your death could impact the support they receive, which is where a joint policy can provide a safety net. The payout can help cover childcare, school costs, or everyday expenses, so life can continue as smoothly as possible.
To save money on premiums
It’s often cheaper than taking out two separate policies. For many couples, this makes it a cost-effective way to get the cover they need without doubling their insurance bill. Joint cover is also easier to manage. You only have one application, one policy, and one monthly payment, ideal if you want straightforward protection.
To provide equal Protection for Both Partners
With a joint policy, both partners are covered for the same amount. No need to balance two different policies or worry about one person being underinsured.
Life insurance can also become a key part of your long-term planning, whether you’re buying a home, starting a family, or building financial stability.
Pros and cons of joint cover
Like any type of insurance, joint life cover has its strengths and drawbacks:
Pros:
- Usually cheaper than two single policies
- Often easier to manage than separate policies
- Ideal for shared financial responsibilities like mortgages and childcare
- Equal cover for both partners
Cons:
- Once the payout is made, the cover ends
- The surviving partner is left without protection unless they take out a new policy
- You’ll need to cancel if you separate or break up
- Less flexible if you each want different levels of cover
What happens if you split up?
Most insurers won’t allow you to split the policy if you get separated or get divorced. Instead, your options are usually to keep paying for it together or cancel the policy entirely.
If the policy is cancelled, you’ll both need to take out new cover individually. That can mean higher premiums, especially if you’re older or your health has changed since you first took the policy out.
Some couples prefer two separate policies from the start, so it gives each person more control if the relationship doesn’t work out.
When might joint cover be the best option?
Joint life insurance tends to work best for couples who are on a similar footing when it comes to age and health. If both partners are relatively healthy and close in age, a joint policy can be more straightforward and often more affordable than taking out two separate plans.
It’s also a good choice if you’re looking for simple, cost-effective protection and want to cover shared financial commitments, such as a mortgage, rent, or household bills. With one policy to manage, you don’t have to worry about keeping track of two separate plans, which makes it an attractive option for couples who prefer convenience.
When might two single policies be better?
Separate life insurance policies could be a better fit in certain situations. For example, if one partner earns significantly more or has children from a previous relationship, individual policies can allow you to tailor the level of cover to each person’s specific needs.
Single policies also provide more flexibility to adjust cover as your circumstances change. This can be useful if you’re concerned about the joint policy ending after the first payout or if your relationship or financial situation might change in the future.
No matter if you prefer to have a joint or single policy, it’s worth having some form of protection. You never know when something could happen to you, so why run the risk of leaving your loved ones vulnerable?
