What is joint insurance?
Joint life insurance protects two lives under the same policy and usually only pays out on the first death (i.e. when the first policy holder dies).
Joint cover is particularly common when protecting a mortgage where both partners provide income to help pay for it. This means that should either partner die the mortgage can be paid off in full, reducing the financial pressure on the surviving partner.
Joint life insurance can be taken out on level term, decreasing term and whole of life policies.
The main features of a joint life insurance policy are:
- It covers two lives under one policy
- It only pays out once, either on the first death or last death
- It can be cheaper than buying two single policies
Advantages of joint life insurance
The only advantage to buying joint life insurance is that it can be slightly cheaper than buying two separate policies.
It’s often worth comparing quotes for both joint and single life insurance as separate policies could provide considerably more cover for only a marginal increase in price.
What happens if we get divorced or the relationship ends?
In the case of a divorce or a relationship ending some insurers may allow you to split a joint life insurance policy. Other insurers may require that you cancel your joint policy entirely with the option to set up separate cover.
If the main purpose of the insurance is to protect your children, you may simply wish to keep your policy running.
Joint terminal illness cover
Terminal illness cover is included with all single and joint term life insurance policies. It’s designed to pay out the full sum assured should the policy holder be diagnosed with an illness resulting in a prognosis of 12 months or less to live by a GP.
With joint life insurance, the terminal illness benefit will cover both policy holders, but will only pay out in the first instance of diagnosis (as per the above).
Some insurers won’t pay out for terminal illness in the last 12 months of the policy term.