Life Insurance – Should I get Joint or Individual cover?

When you are looking for the best option on how to insure you and your partner, it is essential to know the differences between Joint and Single Life insurance policies:

Joint Policy

• Means you and your partner are covered on the same policy with one payout. Therefore, if you and your partner die at same time, your beneficiaries will benefit from one single pay out.
• Are usually cheaper than insuring both you and your partner separately.
• You and your partner need to decide on the beneficiaries jointly.
• If the relationship breaks down: splitting a policy can be very difficult. If one person decides to stop paying their half of the premiums, the burden can be on the other person or the policy will lapse.
• If either you or your partner dies, the payout is given and the insurance lapses, therefore the surviving spouse doesn’t have insurance cover.

Two separate policies

• Two single policies, one for you and one for your partner, mean they’re two completely separate life plans. If you and your partner die at the same time, your beneficiaries would receive two payouts.
• You and your partner can separately decide how much life insurance coverage you each need.
• You and your partner can decide on the same or different beneficiaries for each policy.
• If your relationship breaks down, you will still have separate cover in place.
• If you or your partner dies, one payout is given but the surviving partner still has insurance cover.

Joint insurance can work out cheaper; however having 2 single policies has a lot more flexibility.

One of the main features to think about for long term planning, is if you have a joint policy and your partner dies, the surviving person is not insured.  As life insurance premiums will increase with age, if your surviving partner has to take out life insurance for themself, at this time premiums can be a lot more expensive. This may counteract why you got the cheaper joint policy to start with.