Joint life insurance

What is joint life insurance?

Joint life cover is a single life insurance policy that covers two people, typically a couple.

If one person dies during the policy term, the insurer pays out a lump sum to the surviving partner or beneficiaries. This money can be used to:

• Pay off a mortgage
• Cover outstanding debts
• Support day-to-day living costs
• Provide financial security for your family

Most joint policies are set up on a ‘first death’ basis, meaning the policy pays out once when the first person dies. The policy then ends.

This approach can make financial sense for many couples, because:

• The monthly cost is typically low
• It’s easy to set up and manage one policy

Although joint life insurance policies are popular with couples, policies are often available for any two people who have a financial bond.

Joint vs separate life insurance: which is better?

Choosing between joint and separate policies depends on your priorities.

Joint life insurance:

• Usually cheaper
• Simpler to manage
• Pays out once

Separate life insurance:

• Typically more expensive
• Provides two potential payouts (one for each person)
• Offers more flexibility

A common misunderstanding is that joint life insurance pays out twice - it doesn’t. If you want both partners to be covered independently (for example, if you intend the payment to go to your children), two separate policies might be more suitable.

How much does joint life insurance cost?

The cost of a joint policy depends on both applicants. Insurers will consider things like:

• Your ages
• Your health and medical history
• Whether either of you smokes
• Whether either of you has a dangerous job, or enjoys hobbies considered high-risk
• The level and length of cover

If one partner has a higher risk profile – for example, due to a medical condition or smoking – it can increase the premium for the whole policy.

Find out more about how much life insurance costs.

Types of joint life insurance policies

There are several types of joint life insurance you can consider. The right option depends on your financial goals and what you want the policy to achieve:

Term life insurance

This covers you for a fixed period you choose at the beginning of the policy. There are two main types:

• Level term life insurance: This pays a fixed amount if one of you dies during the policy term
• Decreasing term life insurance: The amount of cover decreases over time, usually in line with a repayment mortgage or other debt being paid off

Whole of life insurance

Whole of life cover provides lifelong cover. Sometimes known as ‘life assurance’, this tends to be more expensive than term life insurance, because there’s a guaranteed payout.

Family income benefit

This type of policy pays out a regular income for the duration of the policy term if one of you dies, rather than a lump sum.

Joint life insurance with critical illness cover

You can often add critical illness cover to a joint life insurance policy.

This means the policy could pay out if one of you is diagnosed with a serious condition, such as:

• Cancer
• Heart condition
• Stroke

In most cases, the policy will pay out once - either on diagnosis of a critical illness or on death. After this, the policy will end.

This type of cover could provide invaluable financial support if one partner is unable to work.

What happens to a joint policy if we separate?

It’s worth bearing in mind that joint life insurance can be more complicated if your circumstances change. For example, if you’re in a couple, but end up separating.

In many cases:

• The policy can’t be split into two separate policies
• You may need to cancel it and take out new individual cover

Some insurance providers offer a separation benefit (also known as ‘guaranteed insurability’). This allows each person to take out a new policy without providing fresh medical evidence. However, this isn’t guaranteed, and will depend on the provider.