The pros and cons of choosing joint life insurance

Published: December 11, 2024 by Jennifer Armstrong

If you and your partner are considering taking out life insurance, one question you may want to answer is: Would single or joint life insurance be better suited to us?

Life insurance is a type of financial protection that would pay out a lump sum if you passed away during the term. The payout would go to your beneficiary, who may use it how they wish, such as to pay off the mortgage, fund day-to-day costs, or allow them to take time off work.

While it can be challenging to think about, life insurance could provide your loved ones with financial security at a difficult time.

Yet, surveys suggest that many households are overlooking the value of life insurance.

According to a report in FT Adviser, almost 3 in 10 under-40s who have a mortgage haven’t taken out life insurance. It could potentially leave their partners struggling to pay the mortgage and other outgoings should the worst happen.

Similarly, Cover Magazine revealed that 72% of over-50s don’t have life insurance either. While some in this group will have paid off their mortgage, life insurance could still provide a valuable safety net for loved ones if you pass away.

If you have a partner, one consideration when reviewing life insurance is whether to take it out separately or jointly. There are pros and cons to both options and it’s important to consider what’s right for you.

The advantages of choosing joint life insurance

Joint life insurance is usually more cost-effective

To maintain the cover life insurance provides, you’ll need to make regular premium payments. When compared to two single life insurance premiums, the cost of joint life insurance is typically more cost-effective.

Joint life insurance could be useful when covering joint commitments

If you and your partner want the same level of cover to reflect joint commitments, joint life insurance could make sense.

Taking out a mortgage is often a trigger for reviewing life insurance, as you may want to ensure your partner could pay off the debt should you pass away. In this case, joint life insurance could be used to provide a way to do so should the worst happen.

Joint life insurance might be more convenient

When applying for joint life insurance, you’ll usually only need to complete one form between you and there will only be one premium payment to factor into your budget. For some, this could be more convenient and make joint life insurance attractive.

The drawbacks of opting for joint life insurance

Joint life insurance will usually only pay out once

Typically, joint life insurance will have no survivor benefits. This means it will only pay out once.

So, if your partner passed away, you’d receive a lump sum but you’d no longer be covered. This might be a concern if you have children or other dependents, as, if you later passed away, they would not receive a life insurance payout unless you took out further cover.

Premiums could be higher if one person is considered a risk

While joint life insurance is often more cost-effective, that’s not always the case. An insurer will consider the risk of you passing away when reviewing your application and may consider health and lifestyle factors.

If you or your partner has an existing medical condition or has lifestyle habits that shorten life expectancy, such as smoking, the premiums are likely to increase. In some cases, this could mean premiums end up being higher for the other party.

Joint life insurance might not be right for your relationship

Finally, you might want to consider relationships before deciding if joint life insurance is right for you.

For example, if you have a child from a previous relationship that you’d like some or all of a life insurance payout to go to, a joint option might not be appropriate for you.

Similarly, it’s important to consider what would happen if your relationship broke down. Providers may divide joint life insurance in these circumstances, but it isn’t always possible and it can be complex. In contrast, with single life insurance, you could simply change the name of your beneficiary if you need to and maintain the cover.

Contact us to discuss financial protection

As well as life insurance, other types of financial protection could offer you peace of mind and security when you need it most. To discuss which options could be appropriate for you, please contact us.

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.


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