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Should we get Single or Joint Life Insurance?

If you have already decided to get life insurance to protect your loved ones in the event of your death, you may be thinking about joint life insurance if you are married or in a long-term relationship.

However, is it better to get single or joint life insurance policies? We’ve put together a guide so you have all the information to decide which option is best for you.



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A single-life insurance policy covers one life and pays out on death. Joint life insurance covers the lives of two people but usually only pays out once when the first person dies, then ends the policy.

How does it work?

You and your partner will be covered by one single policy. The premiums (the money you pay) will be paid into this one policy. If one of you passes away during the policy term (term life insurance) or at any time (whole-of-life insurance) then a lump sum will be paid out. The exact amount of this lump sum will depend on your personal circumstances; ie, your health, mortgage repayments, and ideal lifestyle, and the premiums you pay.

The types of joint insurance

There are two main types of joint life cover. Both of these types will only pay out once but your policy choice will dictate when the pay-out will be:

  • The first death policy – This policy pays out when the first person in your partnership passes away. If your partner dies then it would trigger a payout and vice versa. The second person is then left without cover and the policy comes to an end. As this is the quicker and more streamlined pay-out, most people who choose joint life insurance will go for this option.
  • The second death policy – This policy pays out only when both of the people in the policy pass away. While the first death policy is designed more for preparing for sudden or unexpected deaths, this policy is catered towards long-term planning as it is certain that the policy will pay out eventually.

The cost

As with all types of life insurance, there is no average cost for joint insurance. What are affordable premiums for you will not be for someone else. This also goes for how big a pay-out you want your partner or beneficiaries to get. There are also common factors that will affect the cost of your life insurance, such as; your age, your occupation, your medical history, and your lifestyle.

Two single life insurance policies can often be more expensive at first than a joint life insurance policy, which is why taking out a joint policy can seem more appealing. This is because of the single pay-out, which will be the case whether you get the first death or second death policy.

The cover

If you and your partner would like the same level of cover then joint life cover would be a good fit. This means that you would be paying one set of premiums and the pay-out would be the same for whoever died first.

However, one of you may be the highest earner in the household. You may be able to pay higher premiums and your death may affect the household financially more than your partner. In this case you may want to get two single life insurance policies. This means the lower earner can still get cover, just with more affordable premiums as their death will not affect the family income as much.

The pay-out

There are two types of joint life insurance policies but with both, your beneficiaries will get a single pay-out. It just depends on when this pay-out will be. This is why this can be the more affordable life insurance option.

If you choose the first death policy and one person passes away, then the surviving partner will be older when the cover ends. It is important to remember that cover is harder to get when you are older.

Which type of life insurance should you get?

As well as choosing between joint life insurance or single life insurance, there is also a decision to be made on which type of life insurance to go for.

Term insurance

This is the most popular type of life insurance. If you want to cover for a specific amount of time, to protect your mortgage or your children from the financial impact of your sudden death then this is the insurance to go for. The policy will cover you for the term agreed only, for example; twenty years. Once the term is over the cover will end.

There are three types of pay-out you can get from this policy:

  • Increasing-term insurance – This policy will increase premiums and the potential pay-out as the term progresses. This is an option to go for if you want the policy to keep up with the rising cost of living, your lifestyle, or inflation.
  • Decreasing-term insurance You may want an affordable policy that will sync in with your mortgage or debt repayments. As the term progresses, the premiums and the potential pay-out will shrink as your debts decrease.
  • Level-term insurance If you want a policy where you can be absolutely sure of the premiums you will pay and the lump sum that will potentially go out, then level-term insurance will be best for you.

Family income benefit

Most life insurance policies pay out a single lump sum when you pass away. Family income benefit pays your beneficiaries a regular monthly income. This can often take away the stress that comes from deciding what to do with the pay-out after being handed it all in one go.

The payments will start when you pass away and continue until the end of the term when the policy ends. The premiums for this policy will probably be less expensive than the regular type of term insurance.


Whole-of-life insurance

Rather than covering you for just a specific period of time, this policy will extend for your entire life. This is more expensive than term insurance as it is certain that, at some point, the money will go out.

While other types of life insurance are designed to prepare for sudden or unexpected deaths, whole-of-life insurance is used for long-term planning and investment purposes.


What happens if our relationship ends?It is important to consider the strength of your relationship before committing to a joint life insurance policy. If you cancel the policy point blank, the cover will end and you will get no refund.

There may be the option of converting the joint policy into a single policy for one person. This would then leave the second person without cover.
Do we have to be married to get joint life insurance?You do not have to be married or in a civil partnership to take out joint life insurance.

Couples in long-term relationships or non-traditional households may also decide to opt for a joint policy as it suits their needs more than two single policies would.
Can you get life insurance when you’re older?If you take out joint life cover with a first death policy, you may be in the position of one of you having to look for life insurance later on in life if one of you passes away and the cover ends.

It is recommended to get life insurance early on as the older you are, the more expensive your premiums will be. However, there will be options available to you and there is even a policy geared towards people in their 50s or older.

This is called over 50s life insurance and will accept you without health checks or medical history.
What if either of us becomes seriously ill?With life insurance, your loved ones will receive a pay-out when you die but there is an extra you can opt for called critical illness cover

This will pay money to you personally if you are diagnosed with a serious illness or disability during the time you are covered.

If your household is dependent on your or your partner’s salary, this can be an invaluable safety net in the event of an accident. There are two types of critical illness cover:

Combined critical illness cover –This cover will pay-out only once if you are diagnosed with a critical illness within the term. This means that after this you will no longer be covered and if you die later on within the term, your beneficiaries will not receive anything.

Additional critical illness cover –This is the more expensive type of critical illness cover. You will get a pay-out if you are diagnosed with a critical illness or disability but the insurer will also pay-out a lump sum if you die within the term as well.

If you add critical illness cover to a joint life insurance policy, you will only get a pay-out once if you become critically ill. Your life insurance will still cover you after this in case of your death.
Will our life insurance pay-out be taxed?The money your loved ones receive from your life insurance is not counted as taxable income. However, the pay-out is counted as part of your estate. This makes it liable for inheritance tax (IHT).

You can prevent the money from being taxed by writing your policy in trust. You will avoid the tax and your family will probably receive the money quicker as the process will be apart from the proceedings of the estate.

Need more help?

If you want to speak to one of our team of FRIENDLY experts you can call us FREE on 0800 009 6559 or CLICK HERE.

Useful resources

Citizen’s Advice – Sorting out money when you separate

Citizen’s Advice – Living together and civil partnership

Gov.uk – Marriages and civil partnerships in England and Wales

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Is it worth paying for life insurance?

Yes, if you’ve got children or financial dependents then you should have life insurance to protect them if you die. Martin Lewis and the Financial Conduct Authority recommend that you take out life insurance to protect your family and your home. Generally, life insurance premiums start from as little as £5 per month and will be cheaper for younger adults.

Common myths about life insurance:

  • Life insurance won’t pay out (pays out 98% of claims)
  • People with medical conditions can’t have life insurance
  • Life insurance is expensive
  • Savings can be just as effective as life insurance
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Is life insurance worth it? - iam|INSURED

What is the average cost of life insurance per month?

Based on recent research carried out, the average cost of life insurance is approximately £38 per month and the average level of cover is £152,000. Life insurance premiums also vary dramatically from one insurance provider to another and you can reduce your monthly premiums by shopping around.

Fundamentally, life insurance premiums vary depending on your age, health and the amount of cover that you need, starting from as little as £5 per month. You can also get life insurance to protect your family and your home against financial loss if you die.

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Average cost of life insurance - iam|INSURED

What does life insurance cover you for?

Life insurance is a monthly renewable ‘term insurance’ contract that pays out a cash lump sum or regular payments on death to your family or beneficiaries. Policies are most commonly used for family protection or mortgage protection for your loved ones if you die and your household income reduces, plus the additional issues of losing a parent or carer.

Traditional life insurance will not exclude any pre-existing medical conditions and will cover suicide after 12 or 24 months. You can also use life insurance for business protection purposes as well as tax-efficient business life insurance for directors or key people.

What are the disadvantages of life insurance?

The biggest and most common problem that consumers have with life insurance is the cost and the monthly premiums. This is the top reason for policy cancellations and why more people don’t take out life insurance to protect their family.

Another key disadvantage with life insurance is that it holds no investment value, nor can you cash it in. Life insurance works like any other traditional general insurance policy (e.g. car insurance, house insurance, pet insurance etc.), you pay a monthly premium and it will pay out in the event of a claim. Some people decide to use savings instead of taking out life insurance but you need to make sure that you have sufficient savings to cover the costs of death for your family.

Why do I need life insurance?

The fact is that nobody actually ‘needs’ life insurance, but it is strongly recommended that families and couples have cover to protect their loved ones in the event of death. Martin Lewis recommends life insurance and says “this is something that every parent, partner, or person with any other type of dependent needs to consider”.

Life insurance financially protects your loved ones if you die and pays out a cash lump sum to repay your mortgage, pay for school fees, replace lost income, and pay for regular outgoings. Mortgage life insurance is not linked to your mortgage debt so you can use it to pay off some or all of your mortgage.

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