What is joint life insurance?
Joint life insurance is a policy that covers two people, while single life insurance only covers one person. Single life insurance is the more popular option, chosen for 59.28% of policies, whereas joint life insurance accounts for 40.72%*.
While single life insurance policies might be more commonly chosen, joint life insurance can often work out cheaper - so if it’s an option for you, it may be worth considering.
Joint life insurance could be suitable for a married couple, a long-term unmarried couple or perhaps even business partners. In most cases, once one of the two people passes away, the whole policy comes to an end, and the final pay-out is made.
*The percentage of consumers looking to take out joint life insurance versus single life insurance, according to MoneySuperMarket data from January – September 2018.
How does joint life insurance work?
A joint life insurance policy offers cover for both you and your partner in case anything were to happen to either of you during the policy term.
You’ll both be covered by one policy, and you’ll decide how much of a payout you’d need to cover both of your financial commitments if one of you were to pass away. This would typically be enough to cover your mortgage repayments and the needs of your family.
You’ll then take out a cover amount (the ‘sum insured’), and this would be the amount the insurer would pay if either of you passed away. You can choose whether the sum insured stays the same no matter when you claim– level term life insurance – or whether it decreases as you pay off your mortgage – decreasing term life insurance.
A joint life insurance policy will only pay out once, but when will depend on the type of policy:
- 'First death’ policy – A life insurance pay-out is made after the first death that occurs. A second payment will not be made upon the second death, so the survivor will no longer have life insurance cover
- ‘Second death’ policy – A life insurance payment is made only after both members of the couple have passed away.
It is more common for an insurer to offer a first death policy rather than a second.
A first death payout on a joint life insurance policy can help to make the payout process quicker and easier for the surviving partner.
If you opt for a policy that pays out when the first partner passes away then the second partner can decide to then take out a single life insurance policy – but their payments will most likely be more expensive at this point.
If you were both to pass away at the same time during the policy term then the money would become part of your estate – unless you’ve written the policy in trust and named another beneficiary.
A ‘second death’ policy will typically only be an option when you take out a whole of life insurance policy. Whole of life insurance policies tend to be more expensive because it is guaranteed that the insurer will need to pay out whenever the second partner passes.
You will pay one monthly payment between the two of you for your insurance.
Single versus joint life insurance search popularity by age group, according to MoneySuperMarket data from January – September 2018.
What does joint life insurance cover?
Joint life insurance pays out a set amount of money to the surviving partner if one of you passes away during the policy term. A joint life insurance policy payout could help to cover:
- The mortgage repayments
- Any household bills and day-to-day expenses
- Any current or future schooling fees
- Any money you’ve borrowed that you still need to pay back
- Any extra money that would help your family if one of you couldn’t be there
The most popular amount of cover to take out for both single and joint life insurance policies is £100,000 - £200,000, according to MoneySuperMarket data.
The average amount of cover consumers look to take out across all term lengths, according to MoneySuperMarket data from January – September 2018. This amount also includes critical illness cover where it has been added to a policy.
How much does joint life insurance cost?
Life insurance premiums vary greatly. As you might expect, the sooner you take out a policy, the cheaper it is. Under 30s pay the least, on average, at £10.88 a month for level term joint life insurance without critical illness cover – but if you wait until you’re 50 years-old to take out a policy, the average cost is £63.07.
Age group | Monthly cost of joint life insurance only |
|---|---|
18-29 | £10.88 |
30-39 | £17.56 |
40-49 | £33.72 |
50-59 | £63.07 |
60+ | £215.13 |
The average costs above were based on MoneySuperMarket customers looking for level term joint life insurance cover only (without critical illness cover), with a total cover amount between £150,000 and £200,000 for 10 – 20 years, from January to December 2018.
If you’re aged 50 – 80 years-old, a specialist over 50s life insurance provider can offer a more affordable life insurance option than a standard life insurance policy.
Joint life insurance and critical illness cover
You can choose to add critical illness cover to your standard joint life insurance policy. Critical illness can only be claimed once on a joint life insurance policy – so only one person will be able to claim for critical illness if they need to.
The joint life insurance policy will still continue if a claim has been made, but there will no longer be critical illness cover.
Critical illness cover is still cheapest if you take out cover when you’re younger. For under 30s, the average monthly cost of level term joint life insurance with critical illness cover is £25.73, but then increases to £171.86 for people aged 50 to 59, and £531.03 for people aged 60+.
Age group | Monthly cost of joint life insurance with critical illness cover | Monthly cost of single life insurance with critical illness cover |
|---|---|---|
18-29 | £25.73 | £13.74 |
30-39 | £45.52 | £24.64 |
40-49 | £95.09 | £51.60 |
50-59 | £171.86 | £101.81 |
60+ | £531.03 | £334.16 |
The average costs above were based on MoneySuperMarket customers looking for level term single and joint life insurance with critical illness cover included as an additional or a combined policy, with a total cover amount between £150,000 and £200,000 for 10 – 20 years, from January to December 2018.
Advantages of taking out a joint life insurance policy
- Cheaper premiums: In most cases, opting for joint cover is cheaper than taking out two individual life insurance policies.
- A payout is due irrespective of who dies first: A payout becomes payable after the death of the first policyholder, even if they are not the main breadwinner (‘first death’ policy).
- Available to unmarried couples: Joint life insurance can also be taken out between business partners, for example.
Disadvantages of joint life insurance
- If a relationship ends, cover cannot be split: If a couple with a joint policy split up, the insurer cannot divide the cover.
- If circumstances change: If one partner decides they don’t want to pay their share of the premium or can no longer afford to, and the other policyholder is unwilling to cover both, the policy would cease for both parties.
- One pay-out if both policyholders pass away at the same time: If both people die at the same time and have a joint policy, there will still be just the one final pay out.
Single versus joint life insurance?
Joint life insurance is an alternative to taking out two single life insurance policies and can work out cheaper between the two of you.
Instead of taking out two separate policies to cover your current financial contributions to any assets you have together - a mortgage, for example - you have one. You take out a cover amount that would be enough to cover both of your contributions and leave the other person financially secure.
This is because a joint life insurance policy only pays out once, so your total cover amount as a couple would be paid in one lump sum. It won’t be two payouts, each proportionate to your individual contribution – which is what would happen if you were to choose two single policies.
Some examples of when two separate single policies can work better than a joint life policy include when one person in the couple:
- Has a pre-existing medical condition or a family history of critical illness
- Has a high risk job or hobbies
- Smokes
- Earns more and the amount they’d need to cover their financial contribution would then be more
The examples above can increase the cost of a life insurance policy, which may make the monthly premium for your joint life insurance unaffordable between you. If this happens then it can make more sense to take out two single life insurance policies that reflect your individual cover needs and are affordable for both of you.
The average monthly cost of joint life insurance versus single life insurance by age group is:
Age group | Monthly cost of joint life insurance only | Monthly cost of single life insurance only |
|---|---|---|
18-29 | £10.88 | £6.15 |
30-39 | £17.56 | £9.64 |
40-49 | £33.72 | £18.84 |
50-59 | £63.07 | £37.98 |
60+ | £215.13 | £138.25 |
The average costs above were based on MoneySuperMarket customers looking for level term single and joint life insurance cover only (without critical illness cover), with a total cover amount between £150,000 and £200,000 for 10 – 20 years, from January to December 2018.
Could I take out a single policy later?
If your other half passes away and your joint policy has paid out on a ‘first death’ basis, you might consider taking out a single life insurance policy for the remainder of your years.
If you’re considerably older or present a greater health risk than when you took out your joint life insurance cover, you will most likely fall into a high risk category and your life insurance is likely to cost much more.
For example, if you bought a single level term life insurance policy with critical illness cover, the average monthly cost would be £24.64 if you were aged 30-39. When you hit the 50-59 age bracket, the average price jumps to £101.81 – and if you’re over 60 the average cost is £334.16.
Removing critical illness insurance would make this much cheaper, but the reduced premium would come with a reduced level of cover that you may need. Without critical illness cover, the average price of level term life insurance only for people aged 50-59 is £37.98 and if you’re aged 60+ the average cost is £138.25.*
*The average costs above were based on MoneySuperMarket customers looking for single level term life insurance cover with additional critical illness cover and without, with a total cover amount between £150,000 and £200,000 for 10 – 20 years, from January to December 2018.
Can a joint life insurance policy be put in trust?
If your joint life insurance policy payout will be made on a ‘first death basis’ then the money will automatically be paid to the surviving spouse. But you can put a ‘first death basis’ joint life insurance policy in trust to name another beneficiary for the money if both of you were to pass away at the same time.
This means the money won’t be added to your estate and subjected to inheritance tax. So your beneficiary will most likely receive the money quicker.
A whole of life joint life insurance policy that pays out on a ‘second death basis’ can also be written in trust. The payout will often be made to a beneficiary to help cover the cost of any inheritance tax bills on your estate.
What happens to your joint life insurance policy if you separate?
If you take out a joint life insurance policy with a partner and you separate during the policy term then you might be able to split the policy into two separate ones. Whether or not you can divide the policy will depend on the insurer.
If you are able to separate the policy then there will most likely be certain terms and conditions around this. For example, your insurer may say you need to let them know you wish to separate the policy within 6 months of the separation happening.
You’ll need to be prepared that your monthly insurance premiums will most likely be higher for single cover than joint. And updates to your health, lifestyle, cover amount and age will most likely increase the premiums too.
Compare joint life insurance
Comparing joint life insurance quotes can help you find the right policy for you and your partner. You can use MoneySuperMarket’s life insurance comparison tool to compare joint life insurance quotes.
Answer a few questions about you, your health and lifestyle and the amount of cover you need. You’ll need to make sure your responses are accurate and honest to make sure your dependants would receive a payout if you passed away.
You’ll also be able to add a second applicant to your policy to make it a joint life insurance policy. You can then choose whether you want to take out level term or decreasing term cover.
You’ll then both be able to add more detail about your health and lifestyle, which means you can compare personalised joint life insurance quotes by price per month and features.
Some prices will be guaranteed and fully underwritten which means you can buy immediately. With some you’ll need to confirm certain details with the insurer.
You can change the cover amount, cover length and cover type to see how this affects the monthly price you pay.
If you want to add critical illness cover to see how this affects the cost of life insurance then you can do this by selecting ‘Add critical illness cover’.
You might also want to go through the tool to see how much it would cost to take out two single life insurance policies to compare the cost for two separate policies versus one joint policy.