Joint life insurance is an insurance policy taken out against the lives of two people, typically a husband and a wife. As with single life insurance, there are two types of cover; term or whole.
With a joint term life insurance policy, both people are covered for a specified term of years. Joint whole life insurance is permanent – As long as the policy holder pays the premiums, the policy will stay in force, both people remaining covered.
A joint life insurance policy will pay out the sum insured if one of the policyholders dies. Naturally, for term policy holders, this will only be the case if the death occurs during the specified duration of the policy.
The main consideration to take into account with a joint life insurance policy is that if either policy holder were to die, the policy pays out and then is terminated, leaving the surviving uninsured. The payout will obviously be valuable, but will not last forever, and it may be very difficult for the surviving partner to obtain affordable life insurance, especially if he or she is over 65 years old, has health problems or both.
If you do not anticipate this to be a particular problem for you, then a joint policy is a good way of saving money, as the premiums will be less than those on two separate life insurance policies. People who find joint insurance particularly advantageous include…
- …new homebuyers. The cover will pay off the mortgage and other related debts.
- …new parents. The cover will pay for childcare/tuition fees if the spouse dies before the children are grown.
- …retired people. There is the option to purchase a last to die annuity which guarantees a regular monthly income (albeit of low payments, as the annuity has to last longer)
However, it is worth noting that more and more life insurance providers are giving the surviving partner of the policy the option to purchase an individual life insurance policy without having to prove his or her insurability.
*All information displayed in this table is subject to change. Please consult individual insurers for terms and conditions.
