Single vs joint life insurance
If you’re in a couple, and especially if you have children, you should both have cover to protect your family. Your choice is between each having your own, separate policies, or having a joint policy that covers you both.
Key takeaways
Life insurance ensures that dependents are financially supported in case of unexpected death, making it essential for those with families or financial obligations
Couples must decide whether to opt for separate policies, which provide two potential payouts, or a joint policy, which typically pays out once but may be more cost-effective
Term insurance, whole-of-life cover, family income benefits, and critical illness cover each serve different needs, and comparing policies can help find the best fit for financial protection
Life insurance might not be pleasant to think about, but it's crucial if you have people depending on you financially. With a policy in place, you know money will be available to them if you die unexpectedly within a certain period of your choosing.
What is life insurance?
Life insurance pays out a tax-free, fixed lump sum in cash when you pass away, which can help your loved ones cope with any financial obligations you have.
There are different types of life insurance policies, and whichever one you choose may depend on whether you are part of a couple or not. You will have the choice to take out individual life insurance policies or joint life insurance policies.
But which is best suited to your needs?
What is single life insurance?
Single life insurance is a policy that covers one person and pays out a sum of money if the policyholder dies. The policyholder chooses the amount of coverage and the length of the policy.
What is joint life insurance?
Joint life insurance is a policy that covers two people with one premium, and pays out a lump sum when one or both people die. It can be a cheaper option than two individual policies and is suitable for married couples, long-term partners, business partners, or friends who share a mortgage.
What's the difference between single and joint life insurance?
There are a few key differences between single and joint life insurance, including:
Feature | Single Life Insurance | Joint Life Insurance |
|---|---|---|
Cover | Covers one person only | Covers both partners under one policy |
Payout | Two separate payouts if both policyholders die | Only one payout (either on first or second death) |
Cost | Generally more expensive than a joint policy | Typically cheaper than two single policies |
Flexibility | Each partner can choose different coverage levels | Fixed level of coverage for both partners |
Ideal for | Couples wanting full individual protection; those with different coverage needs | Couples who want a shared, cost-effective policy |
Separation impact | No impact—each person keeps their policy | May need to cancel, split (if allowed), or convert to cover specific debts |
Policy add-on options | Level term, decreasing term, whole-of-life, critical illness add-ons | Usually term insurance with first death or second death payout options |
Estate planning | Each policyholder has their own policy payout for beneficiaries | First death payout goes to the surviving partner (unless written in trust) |
Should I buy a single or joint life insurance policy?
If you’re in a couple, and especially if you have children, you should both consider cover to protect your family. You have the choice between having your own separate policies or having a joint policy that covers you both.
Here are some things to consider before making a decision:
What to consider before buying a single or joint life insurance policy
The cost of a life insurance policy
Two single policies might be more expensive than a joint policy because they cover each person individually and pay out upon each death.
This means that if both partners were to pass away during the term of the policies, there would be two separate payouts, which could provide a more substantial financial safety net for dependents.
On the other hand, a joint policy is typically designed to cover a shared expense like a mortgage and will only pay out once, usually on the first partner's death.
This can be a cost-effective solution for couples looking to ensure their shared financial commitments are met, but it may not provide the same level of security as two individual policies.
The cost of life insurance policies is influenced by various factors, including age, health, occupation, lifestyle habits, and the amount of cover you need. To get accurate premium estimates, it's recommended to use MoneySuperMarket to compare policies and find the best deal for your circumstances.
Level of cover
The main earner in a couple might need a higher level of cover due to the greater financial impact their death could have on the family.
This is where individual policies can be advantageous, as they allow for different levels of cover, which can result in lower premiums for the partner with a lower income or fewer financial responsibilities.
This could also be a benefit if you or your partner has a pre-existing life insurance policy such as a death in service benefit offered by some workplaces.
This would mean one of you would already be at least partially covered. Meanwhile, the other can take out a single policy to cover themselves.
The payout
With separate single life insurance policies, there's the potential for two payouts if both policyholders die within the term.
This can provide a significant financial cushion for any dependents left behind, helping to maintain their standard of living and cover any outstanding debts or expenses.
A joint policy, however, only pays out once, and there are two types to consider: first death and second death. First death policies pay out after one policyholder's death and are common in joint life term insurance, providing a lump sum to the surviving partner.
Second death policies pay out after both policyholders die and are often used for tax and estate planning, as they can help manage potential inheritance tax liabilities.
Single vs joint life insurance – pros and cons
When deciding between separate policies and joint life insurance, couples need to weigh the pros and cons carefully. Each option has its own set of considerations that could significantly impact the financial future of the surviving partner or the family as a whole:
Single life insurance pros and cons
Here are some advantages and disadvantages of single life insurance:
Single life insurance pros and cons
Pros
Separate payouts: If both partners pass away, two payouts are made, providing more financial security for dependents
Customisable cover: Each person can choose different coverage amounts based on their income, financial obligations, and health
No impact from separation: If a couple separates, each person retains their policy with no need for adjustments
More flexibility: One person can change, increase, or cancel their policy without affecting the other
Estate planning benefits: Policies can be written in trust to minimise inheritance tax and ensure payouts go directly to beneficiaries
Cons
Higher cost:Two separate policies are typically more expensive than a joint policy
Not always cost-effective: If the primary goal is covering a shared expense (e.g., a mortgage), a joint policy may be more economical
More Paperwork: Managing two policies requires separate applications, medical checks, and payments
May be unnecessary for non-earning partners: If only one partner contributes financially, a joint policy may be sufficient
May not suit all budgets: If affordability is a concern, a joint policy may offer better value
Joint life insurance pros and cons
Here are some pros and cons to joint life insurance:
Joint life insurance pros and cons
Pros
Separate payouts: If both partners pass away, two payouts are made, providing more financial security for dependents
Customisable cover: Each person can choose different coverage amounts based on their income, financial obligations, and health
No impact from separation: If a couple separates, each person retains their policy with no need for adjustments
More flexibility: One person can change, increase, or cancel their policy without affecting the other
Estate planning benefits: Policies can be written in trust to minimise inheritance tax and ensure payouts go directly to beneficiaries
Cons
Higher cost: Two separate policies are typically more expensive than a joint policy
Not always cost-effective: If the primary goal is covering a shared expense (e.g., a mortgage), a joint policy may be more economical
More Paperwork: Managing two policies requires separate applications, medical checks, and payments
May be unnecessary for non-earning partners: If only one partner contributes financially, a joint policy may be sufficient
May not suit all budgets: If affordability is a concern, a joint policy may offer better value
What happens to joint life insurance on separation?
If a couple separates, the fate of a joint life insurance policy becomes a critical issue. Some insurers may allow the policy to be split into two separate ones, though this is likely to come at a higher premium due to the individual coverage now required for each person.
If splitting the policy isn't an option, one partner may choose to convert the joint policy to cover a specific debt like a mortgage, while the other partner might need to seek out a new policy. Cancelling the policy is also an option, but it's important to note that no refund on premiums will be given.
The decision on how to proceed will depend on the cost, the terms of the policy, and the personal circumstances of both individuals.
What life insurance is best for couples?
Once couples have decided between single or joint policies, they must also consider the type of life insurance that best suits their needs. There are several options available, each with its own benefits and considerations:
Types of life insurance for couples
Level term life insurance
With level term cover, the potential payout remains the same for the duration of the term, ensuring that dependents receive a fixed sum regardless of when the policyholder passes away within the term.
Decreasing term life insurance
With decreasing-term cover, the potential payout reduces over the course of the term. This type of policy is usually matched to reducing debt, such as a capital and interest mortgage.
As the debt decreases, so does the payout, which can make decreasing-term cover cheaper than level term cover because the expected payout is lower over time.
Family income benefit
Family income benefit policies pay an agreed monthly amount until the end of the term, rather than a lump sum. These policies can be cheaper than level term policies and potentially cheaper than decreasing-term policies due to the smaller total payout.
The regular income can help families maintain their lifestyle without the need for significant financial adjustments.
Critical illness cover
If you add critical illness cover to your life insurance policy, this means you’ll get a payout if you’re diagnosed with a serious illness.
This can include conditions such as cancer, strokes, heart attacks, or becoming incapacitated after an accident. It's an additional layer of protection that can make a significant difference during a difficult time.
Whole-of-life cover
Whole-of-life cover pays out when you die, whenever that may be as there is no fixed term. This type of cover is often used for investment and estate planning purposes, providing a guaranteed payout that can be used to settle inheritance tax bills or provide a legacy for beneficiaries.
Should I put my life insurance policy in trust?
When you take out term insurance, you may be given the option to have the policy ‘written in trust’. This means the policy is excluded from your estate for probate purposes, allowing for a quicker payout to beneficiaries.
The proceeds of a life policy written in trust will not be liable for inheritance tax, which they might be otherwise, so it's more beneficial for your loved ones.
How does joint pricing differ to other types of cover?
Cover type | Average price | Price from |
|---|---|---|
Family- Level term | £23.50 | £8 |
Mortgage- Decreasing term | £22.56 | £7.32 |
Joint life insurance | £30.58 | £12.03 |
A joint policy is usually a cheaper option than taking out two individual policies.
Compare life insurance quotes
To find the best life insurance policy for your needs, it's wise to compare quotes. MoneySuperMarket offers a straightforward way to do this by providing your personal details and comparing a range of deals from UK providers.
Once you've found the right policy, you can finalise your purchase directly with the chosen provider, ensuring that you and your loved ones are protected.
Author
Saarrah Mussa
Former Content Writer
Saarrah was a MoneySuperMarket's in-house pet insurance expert. With broad experience writing across insurance products Saarrah is acutely aware of the complexities and costs consumers have to face...
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Collette Shackleton
Content Writer
Collette Shackleton is a highly skilled Content Writer who has over nine years’ experience creating helpful and engaging personal finance content for consumers. Collette shares her experience as a...