The Benefits of Joint Life Insurance

• Home
• Resources
• The Benefits of Joint Life Insurance

What is joint life insurance?

A guide to joint life insurance is a policy that is designed to cover a couple rather than an individual. It suffers from a lot of negativity because it can stand up poorly against two individual policies, but if used correctly, there are advantages of joint life cover that may not be immediately obvious.

How does a joint life insurance policy work?

A standard life insurance policy pays out when you die. It’s simple to understand.

A joint life insurance policy covers two people and pays out when the first person dies. The second person is then left without cover.

Two standard individual policies pay out whenever either person dies. At no point is one of the parties without cover.

Single vs. joint life cover – which is best?

Almost every single article you read, and almost all the advice you will get, says that single life insurance is best, and that two singles is best to cover two people.

And in almost every situation, that would be the right answer.

But only almost.

When is joint cover best?

When someone is staying at home to bring up and look after the children.

When there is only one person going to work, it is so tempting to assume that only they need life insurance – after all, the other partner isn’t bringing in any money, so they don’t need a policy, right?

Wrong. Once you delve into the concept a bit, it is easy to see how much value the other person brings, after all, if they were to be gone, the working partner might find themselves needing to give up work to look after the young children, or pay for help.

So, two single policies is right, then? One for each person?

No. Two single policies is expensive – more expensive than joint cover and doesn’t actually accomplish what you are after any better.

The most important thing is that the surviving partner can look after the family – that is the aim you are trying to achieve, and you get that by making sure whoever dies first is covered so that the mortgage is paid off and there’s money available for the next ten years or so.

The second partner dying, while awfully tragic, doesn’t actually have a huge financial implication – there’s no outstanding mortgage (it was paid off when the first partner died) and either there will be money remaining from the policy to help look after the children, or they’ll be older and have moved out (or be close to it).

Typically, we suggest a level term insurance policy of ten times your salary to pay for your loved ones, and an additional decreasing term life insurance policy designed to pay off the mortgage.

Ten times your salary is to provide ten years of security and typically lasts longer with the mortgage fully paid off. But what about a fifteen-year version – 15 times your salary?

With this level of joint cover, even the youngest baby is going to be covered until they move out. Fifteen annual salaries with no mortgage costs will last 18 years or more – that baby is off to university with no financial problems during their entire childhood.

A joint life insurance policy of 15 times your salary with a second decreasing joint life insurance for the mortgage is the perfect solution for any family where one partner intends to remain a homemaker.

Is joint life insurance cheaper than two single policies?

Why not call us to find out? We can look into the best life insurance policies for you and get a joint life insurance policy put in place even if you are not married.

Fill in our contact form or call us for cheap life insurance quotes and you could be providing your family with all-important financial security by the end of the day.