Family · Finances

A 2023 guide to joint life insurance for married couples

A 2023 guide to joint life insurance for married couples

Photo by Ben White on Unsplash

If you’re in a married couple or civil partnership, particularly with shared responsibilities such as a mortgage and/or children, having a life insurance policy in place is vital for financial security. Joint life insurance can be a quick and affordable option, popular amongst couples on a budget who need financial family protection.

Below, the biggest life insurance broker in the UK, Reassured, discusses joint life insurance policies for married couples, to help you decide if it could be the right policy for you…

What is Joint life insurance? 

Joint life insurance is a policy that covers the lives of two people and will pay out once if either person passes away during the policy term.

There are two types of joint life insurance you can get:

  1. First death -The pay-out will be made to the surviving person upon the first death. The cover will then expire (this is the most common option).

  2. Second death – This is when a pay-out will only be made if both policyholders pass away during the policy term.

You do not necessarily have to be a married couple for joint life insurance. It is also available for non-married partners or even, business partners/two family members.

Why do married couples often choose joint life insurance?

It is a popular option for married couples, but why is this and what are the benefits? Here are a few points to help answer these questions:

  • Joint policies can be 25%-40% cheaper than having 2 single policies

It could also be appealing to those who are on a tight budget, including those who rent or have a mortgage, and rely on each other’s income to cover expenses. The reason for it being cheaper is because there’s only one premium to pay each month between both parties and there’s only one potential pay out.

  • Quick and easy: only one application form to complete

This can make the process less time consuming as it is one application form, instead of one each. It will require information about both partners, including your current and previous health, lifestyles and about your chosen policy, including cover amount.

  • Helps to protect shared assets

Being able to protect assets that are shared. You may share lots of finances such as: a mortgage, loans, credit cards, and childcare. Having a shared policy will help provide cover so that the surviving partner can remain in the home and pay off outstanding expenses should the worst happen.

Are there any disadvantages?

Yes, while there are some great advantages to why joint life insurance could be for you and your partner, here are some other factors to consider:

  • Only one pay-out is made

Meaning the surviving partner is left with no life insurance for themselves if one partner passes away, resulting in having to secure a new policy at later date for financial protection, which can lead to higher premiums.

  • One partner being a ‘high risk’ applicant

Premiums can cost more if you are seen as high-risk to insure (a pay out being more likely to occur due to a medical condition or dangerous job). So, if your joint life insurance policy was more expensive due to this reason, and only one partner is seen as high risk, then the low-risk partner will be paying higher premiums than they need to.

  • May be difficult to split the policy if you divorce

If you and your partner separate during the policy term, then it can be difficult to split the policy into two single policies (depending on your insurer). However, some insurers will include a ‘separation option’ within their policies, this is usually included in the terms and conditions.

What types of couples life insurance are there?

Just like singular policies, there are many different joint options, here are some of the main choices:

  • Joint term

Cover for a specified period (such as 30 years). If either partner passes away during this time, a pay-out will be made.

The most affordable option for those on a budget. Ideal for young married couples who’ve just bought a home and/or started a family together.

  • Joint family income benefit

Provides monthly payments (rather than the typical lump sum pay out) if one partner passes away during the policy term.

It can help to replace an income so the surviving partner can continue their current lifestyle, therefore suitable for young couples or those on a budget because the monthly payments will be able to pay for childcare and other costs that would arise if the partner who stayed at home were no longer around.

  • Joint critical Illness

If you’re diagnosed with a serious illness, you can make a claim and receive a pay out to help with things like medical bills. If one partner makes a claim, the pay-out will be made and cover will expire.

Suitable for any couple who have shared financial commitments and want to protect either partner’s income.

  • Joint whole of life

What it is: Lifetime cover which guarantees a pay-out to the surviving partner when one partner passes away.

It’s generally used by wealthier couples who want to make sure their children, as they become adults, have inheritance money or to cover any debts left behind.

This is not always the best option if you are a high-risk applicant as paying inflated premiums over your lifetime could lead to you paying more into the policy than it will pay out.

Joint life insurance for married couples

Deciding on the right policy type can be hard, especially when you aren’t sure if it should be joint or singular. By comparing quotes, you can explore a variety of options to see what is best suited to you and your partner’s needs. Using a life insurance broker or a reputable comparison website can help you find the perfect policy at an affordable price.

Life insurance protection can secure your family’s financial future if the worst were to happen. £200,000 worth of cover started from just 20p a day – if you don’t have cover in place, why not seize the day.

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