Single vs joint life insurance

Should I get single or joint life insurance?

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We help you decide between having a joint life policy for you and your partner and each having your own policies

Single or joint life insurance?

If you have dependents – people who rely on you financially – you need life insurance. With a policy in place, you know money will be available to them if you die unexpectedly within a certain period of your choosing.

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.

You both need cover even if only one of you is earning. Life insurance is not just there to replace a breadwinner’s income – it can also pay for childcare and other costs that would arise if the partner who stayed at home were no longer around.

The choice between separate policies and a joint policy depends on several factors, but here we help you consider the options.

Single vs joint life insurance – key information

If you’re thinking about taking out life insurance as a couple, here’s what you should consider before deciding between two separate policies and joint cover:

Cost

The cost of life insurance will depend on many factors, including your:

  • age
  • health
  • occupation
  • lifestyle habits
  • amount of cover

While two single policies can sometimes be more expensive than combined cover for the both of you, this isn’t always the case.

The average price of a joint life insurance premium with a sum insured of £100,000 - £200,000 (without critical illness cover) would be £14.39 per month for two people aged between 25 and 34, and this increases to £34.14 per month for two people aged 45 to 54.

Meanwhile, single life insurance for the same amount of sum insured costs an average of £9.04 a month for an individual aged between 25 and 34, and £21.21 for people aged 45 to 54.

Age group

Monthly cost of single life insurance

Monthly cost of joint life insurance

Under 25

£5.89

£11

25-34

£9.04

£14.39

35-44

£13.35

£22.29

45-54

£21.21

£34.14

55-64

£33.89

£53.96

Figures are for term life cover worth £100,000 and £200,000 sold on MoneySuperMarket between May 2019 and April 2020.

Level of cover

If either you or your partner is the main earner, you might each also want to look for different levels of cover. This is because the death of the highest earner would be more likely to impact your family’s financial situation – therefore you may want to take out a higher amount of cover for this earner.

Taking out individual life insurance policies would let you do this. As a result, the lower earner can insure themselves for a lower amount so they won’t have to pay the same premiums that the higher earner would.

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, while the other can take out a single policy to cover themselves.

The pay-out

If you and your partner each take out a single life insurance policy, your beneficiaries will potentially get two pay-outs – one for each of you if you were both to die within the term of your policies. However, a joint policy would only pay out once, depending on the policy you choose:

  • First death: these policies pay out on the death of one of the policyholders within the stated term. That means the other person no longer has life insurance. If they were then to buy insurance for themselves at this point, they would face a higher premium on account of their increased age. First death policies are the most common form of joint life term insurance.
  • Second death: a second death policy only pays out once both policyholders have died. These policies are typically used for tax and estate planning purposes, rather than to provide financial protection to dependants in the event of an early and unexpected death.

Your relationship

Another point to consider with joint life insurance is what would happen to the policy if your relationship broke down.

Some insurers may allow you to split your joint policy into two separate ones – though this will probably mean a higher premium for each of you.

If this isn’t possible, one of you may be able to convert the joint policy into a single policy, perhaps to cover the mortgage on the family home. The other partner would then need to arrange a single policy for themselves.

The final option would be to cancel the policy - you won’t get any refund of premiums you’ve already paid - with each of you taking out your own policy.

Your decision will be influenced by the cost of these options and your own preferences and circumstances.

Types of life insurance

In addition to deciding whether you need single or joint life insurance policies, you also need to choose from:

Level or decreasing-term insurance

Term insurance is designed to pay out money to support the dependants of the policyholder following his or her death within a specified number of years – the ‘term’. The amount to be paid out is called the ‘sum insured’.

With level term cover, the potential pay-out remains the same for the duration of the term.

With decreasing-term cover, the potential pay-out reduces over the course of the term. This type of policy is usually matched to a reducing debt, such as a capital and interest mortgage.

Decreasing term cover is cheaper than level term cover (on a like-for-like basis) because the insurer would expect to pay out a lower amount.

Family income benefit

With family income benefit, the policy is designed to pay out an agreed amount every month, rather than a lump sum. Payments are made until the end of the specified term, so if you have a 20-year policy and die after 15 years, payments will be made for 5 years.

The insurer is committing to pay out a smaller amount, so a family income benefit policy will be cheaper than a level term policy. Because the insurer won’t have to pay anything in the form of a lump sum, it may also be cheaper than a decreasing-term policy.

You can run quotations on our life insurance channel to work out which policy suits you best in terms of the mix of price and cover.

Critical illness cover

If you add critical illness cover to your life insurance policy, this means you’ll get a pay-out if you’re diagnosed with a serious illness. This can include cancer, strokes, heart attacks, or becoming incapacitated after an accident – how comprehensive your cover will be depends on the policy.

There are two types of critical illness cover:

  • Additional critical illness cover: Life insurance with additional critical illness cover potentially pays out twice – a) if you’re diagnosed with a critical illness and b) if you pass away (both during the term of your policy)
  • Combined critical illness cover: Combined life insurance and critical illness cover only offers one potential pay-out – either if you’re diagnosed with a critical illness or if you pass away (both during the term of your policy).

With MoneySuperMarket you can take out additional critical illness cover when you’ve completed a life insurance quote, with your premium calculated using the details you gave when applying for life cover. We believe this provides a more flexible and comprehensive solution than a combined policy.

A joint life insurance policy can include critical illness cover, but you’ll only be able to claim on this part of the policy once. You’ll still be covered by the joint life insurance element after making a critical illness claim.

Age group

Monthly cost of single life insurance with critical illness cover

Monthly cost of joint life insurance with critical illness cover

Under 25

£12

£26.92

25-34

£19.06

£34.89

35-44

£28.48

£51.09

45-54

£45.79

£69.50

Figures are for term life insurance worth £100,000 and £200,000 and including critical illness cover, sold on MoneySuperMarket between May 2019 and April 2020.

Whole-of-life cover

Whole-of-life cover pays out when you die, whenever that may be – there is no fixed term.

For this reason, it is used for investment and estate planning purposes rather than to provide funds to clear debts and meet your dependants’ immediate and ongoing living expenses if you die unexpectedly.

Writing your policy in trust

When you take out term insurance, you should be given the option to have the policy ‘written in trust’. When you run a quote on our life insurance channel, you’ll see which companies provide this option.

Putting your policy in trust makes sense because it means any pay-out will not be included within your estate. The effect is to remove it from the probate process so it can be paid to your beneficiaries much more quickly.

Additionally, the proceeds of a life policy written in trust will not be liable for inheritance tax, which they might be otherwise.

Compare life insurance quotes

Finding a better deal for life insurance is easier when you compare quotes on MoneySuperMarket. All you need to do is give us a few details about yourself, including your general health, occupation, and lifestyle, and we’ll give you a list of quotes tailored to your needs.

Then you can browse through the list and compare deals by their cost, level of cover, and any available extra features. Once you’ve found the deal you want, just click through to finalise your purchase.

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