Should we take out single or joint life insurance policies?
An important element of getting your finances in order is to make sure that you are fully covered in the event of death, especially if others rely on your income. There is sometimes confusion with couples, or business partners, as to whether they should take out single or joint life insurance policies.
There are benefits and drawbacks with both types of policy and these are explained below.
Single life insurance
- single life insurance policies will cover each partner in the event of death
- if both partners die within the term of their policy then two amounts will be paid out
- different terms and sums assured can be arranged on each policy
- no need to insure both partners in a marriage or business
- often more expensive than joint policies - BUT NOT ALWAYS!
- in the event of the first death life cover will still exist on the partner
- if partners no longer live together they can take ownership of their individual policies
Joint life insurance
- only one sum assured will be paid out in the event of death
- payment will normally be made in the event of the first death
- if payment is made during the term the surviving partner will have no life insurance cover, replacing this cover could be more expensive due to age or health
- generally cheaper than two single policies
- if both partners die at the same time then only one amount is paid out, if there are dependent young children then two single policies would provide extra cover
How does the cost of single and joint life insurance compare?
Different insurance companies will assess individual applications differently. So I suggest that you obtain a joint life and then separate life insurance quotes by speaking to an independent life insurance specialist.
Then you will know for certain which route is best for you.
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The table below shows examples of monthly premiums for £100,000 of level term insurance over a 25 year term.