What is joint life insurance?

A joint life insurance policy simply covers two lives simultaneously.

You pay one monthly premium, there’s one contract and the terms of the policy protect both named parties.

Upon first death, unless cover operates on a survivorship basis, a lump sum pay out is made to the remaining named party and the cover expires.

On average, joint life insurance can save you approximately 25% in comparison to two single policies.

At Reassured, we can provide you with all the information you require to determine if joint cover is the best option to meet your needs, whilst comparing quotes to save you money.

Simply get in touch to obtain your free, no-obligation joint life insurance quotes...

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How does a joint life insurance policy work?

Joint life insurance involves making one application which will include information regarding both applicants.

It'll take into account key information regarding your age, health, smoking status and the cover you require.

This information will then be used to determine the level of risk you pose to the insurer as a collective and a premium will be calculated accordingly.

This monthly premium will cover both parties simultaneously.

Once in place, cover protects both lives under the same terms until either the expiration of the policy or one party passes away.

If either party passes away during the period of cover, a claim can be made and a pay out issued.

Joint life insurance only pays out once, meaning at this point, the policy ends.

Life insurance joint or single?

Whilst arranging joint life insurance can save you money, there are other factors to consider when determining whether to opt for joint or single cover.

As discussed, joint life cover only pays out upon first death.

This means that if one partner passes away, the surviving partner is left unprotected and needing to arrange new cover at an older age.

Equally, if cover is in place to protect your children and tragically both parents pass away simultaneously, a single pay out may not be sufficient to cover the financial loss of both policyholders.

Two single policies (and two pay outs) can make sure both policyholders are adequately protected in a worst-case scenario.

For all the information you need to determine whether a joint policy is the right option for you and to obtain your free quote, simply get in touch.

How much is joint life insurance?

The main benefit of arranging joint life insurance is that it can save you 25% compared to two single policies.

As with individual policies, the cost of joint life insurance is calculated based on the level of risk you pose.

Factors taken into account include your age, smoking status, medical well being and amount of cover.

Due to joint life cover consisting of only one contract, both parties will experience higher premiums if either policyholder exhibits high-risk factors.

Therefore, if one party smokes or is in poor health, it can result in the other party paying over the odds for their half of the cover.

As a result, it may be beneficial to obtain quotes for both single and joint cover to determine the most cost-effective solution.

Contact Reassured to obtain your free quotes and make a joint vs two single policies comparison.

The table below shows the average cost of 2 single life insurance policies vs a joint policy, for between £100,000 - £200,000 cover (without critical illness)[1].

Age Two single policies A joint policy
Under 25 £11.78 £11
25-34 £18.08 £14.39
35-44 £26.70 £22.29
45-54 £42.42 £34.14
55-64 £67.78 £53.96

How much joint life insurance do you need?

Enter your financial commitments to understand the level of joint cover you require.

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£121,687 is the estimated average outstanding mortgage per household in the UK.

Our property is generally the largest financial commitment any of us will make.

Your life insurance should cover this significant debt should you no longer be around.
£
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According to Money Advice Service, full-time childcare in the UK now costs £242 a week.

The loss of a parent could result in the need for additional childcare whilst the surviving parent increases their hours to account for lost income.

Your life insurance cover should factor in this additional required outgoing.
£
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The average level of debt (minus a mortgage) in the UK is £15,385.

Factoring in any outstanding debts in your name when arranging life insurance ensures this burden is not passed to loved ones.
£
?

You may wish to leave your loved ones an inheritance or lump sum gift upon your passing.

Factoring in the gift amount when arranging your cover will ensure the pay out amount will be sufficient to provide your loved ones with this selfless gesture.
£
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According to SunLife, the average cost of a UK funeral is now £4,417, whilst the total cost of dying is £9,493.

This is a 130% increase over the past 16 years and shows no signs of slowing down.

A significant cost which should be factored into the amount of life insurance you secure.
£
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If you are one of the 65% of the UK who are lucky enough to have savings, this could be used as protection if you were to pass away.

Any pay outs from existing life insurance policies and investments can also be used as financial protection for your loved ones if you were no longer around.

Factor this into your required cover amount.
£ -

Your total cover estimate

£ 0

Let us find your best quotes.

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Joint life insurance application

The application process for joint life insurance is almost identical to singular cover, but it requires both parties to provide information.

Information regarding your age, health, occupation and lifestyles will be collected, along with details of the type of cover and amount of cover you require.

These details will be assessed to determine the level of risk you pose and a premium calculated accordingly.

The application will either be accepted immediately and cover will commence, it may be referred and further information (such as your medical records) may be required or your application could be declined.

An application will only be declined if significant high-risk factors are identified.

The good news is, even if declined elsewhere, at Reassured we may be able to find you a policy.

Our specialist impaired risk team have helped secure cover for 45% of customers declined elsewhere.

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Joint life insurance pay out

As discussed, joint life insurance only pays out once, usually upon first death.

Upon the passing of one policyholder, a lump sum pay out will be made to the remaining policyholder.

At this point, cover expires, and the surviving party is no longer covered.

On occasions, cover may be arranged on a survivorship basis, (see below). This means a pay out will be made on second death, as opposed to first.

In both instances, if the term of cover ends before either party dies, no pay out is made and cover expires.

As with all forms of life insurance, the sum assured (pay out sum) forms part of the policyholder’s estate, making it subject to inheritance tax, (40% over £325,000).

However, it's possible to detach the sum assured from the estate by ensuring your policy is written in trust, (see below).

Tips for cheap joint life insurance

As discussed, joint life insurance is on average 25% cheaper than individual cover, however, you can take certain measures to ensure that you save even more.

  1. Always compare quotes to secure the best deal
  2. Reduce the cost of premiums by living a healthy lifestyle
  3. Arrange cover as soon as possible to avoid increasing costs because of age or ill-health
  4. Choose the best type of cover for your needs to prevent paying for unnecessary cover
  5. Calculate exactly how much cover you require to avoid paying for more protection than you need

Best joint life insurance

The best life insurance to meet your needs will depend on what it is you're looking to protect.

The most common policy to take out on a joint basis is term life insurance.

Term life insurance tends to be the most affordable form of cover and is ideal for young married couples who have just bought a home and/or started a family together (and may be on a budget).

It provides a financial safety net for one partner in case the other partner was to pass away during the term of the policy.

However, joint whole of life insurance provides a guaranteed pay out when (not if) the first policyholder passes away.

It could provide a substantial cash amount for your loved ones to cover funeral costs and enjoy as an inheritance.

To determine the best type of joint life insurance to suit your needs, contact Reassured.

We'll provide you with all of the information you need to make an informed decision.

Joint level term life insurance

Level term life insurance lasts for a specified amount of time (the term) and if you pass away during this period, a lump sum pay out is made.

The sum assured holds its value throughout the life of the policy, making it best suited to aspects which don't change in value.

For example, an interest-only mortgage or an inheritance.

When arranged on a joint basis, the pay out will be made directly to the surviving policyholder.

To arrange joint level term life insurance, contact our award-winning team.

Joint decreasing term life insurance

Similar to level term life insurance, decreasing term life insurance provides cover for a specified length of time and if you pass away, a lump sum pay out is issued.

However, the sum assured decreases in value throughout the policy term, making it best suited to protecting aspects which reduce in cost over time.

For example, a repayment mortgage.

Because the risk to the insurer diminishes over time decreasing term is normally the cheapest policy type.

When arranged on a joint basis, the lump sum pay out will be made directly to the surviving policyholder.

To receive your free quote for joint decreasing life insurance or to compare against level term cover, contact Reassured.

Joint mortgage life insurance

When buying a house, it's common to use the proceeds from a joint mortgage.

To ensure this can be paid should the worst happen to either party, arranging joint mortgage life insurance can provide a pay out to cover the remaining balance.

Mortgage life insurance is not a product in its own right but simply a life insurance policy which would cover the remaining balance of your mortgage if you were no longer around.

The type of cover you secure will depend on the type mortgage you have in place.

Level term life insurance is best suited to cover an interest-only mortgage, whereas decreasing term life insurance is better suited to protect a repayment mortgage.

To ensure your mortgage is adequately protected, simply get in touch for your free quotes.

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Joint whole of life insurance

Whole of life insurance is a form of life assurance.

Whole of life as a joint policy, as with whole of life as a singly policy, may be suitable if both partners are in the later stages of life and in good health.

This is because your medical well-being is taken into account to calculate the cost of your premium. It’s also possible to pay more into the policy than the sum assured if you’re paying premiums over a long period of time.

If joint whole of life insurance seems well suited to meet your needs, contact Reassured to obtain your free quote.

Joint over 50 life insurance

Over 50s life insurance plans offer guaranteed acceptance to all UK residents aged 50-85.

Over 50s policies provide a guaranteed pay out meaning they can’t be arranged on a joint basis.

The key benefit of an over 50s plan is that they require no medical information during the application.

Therefore, they're ideal for anyone experiencing less than favourable health.

At Reassured we can arrange over 50 life insurance from as little as 20p-a-day.

Simply get in touch for your free quotes.

What does joint life insurance cover?

Joint life insurance covers all of the causes of death an individual policy does.

This includes any natural or accidental cause of death.

No exclusions are made, regardless of the high-risk factors identified by either party during application, instead, the cost of premiums is adjusted accordingly.

As with individual cover, suicide won't be covered for the first 12 months and any causes of death which occur due to non-disclosure will also invalidate the policy.

For example, if an applicant declares during application that they don't smoke and are later found to have passed away due to a smoking-related disease.

As a result, it's important to always be honest and forthcoming during the application process.

For any specific questions regarding what life insurance covers, contact our team who'll be able to provide you with all of the information you need.

Joint survivorship life insurance

Unlike typical joint life insurance, joint survivorship life insurance pays out on second death as opposed to first.

This type of joint life insurance is less common but is well suited to those who have savings to cover first death but who would require adequate means to cover the financial loss of the second party for the purpose dependants.

At Reassured, we don't currently provide joint survivorship life insurance.

Joint life insurance if you’re not married

It's not essential to be married to arrange joint life insurance.

Whilst being married may seem like the pretence for joint financial commitments such as life insurance, theoretically, joint cover can be arranged between any two adults.

However, this is most commonly married couples or those entered into a committed relationship.

When the first party passes, the second receives a pay out from the policy.

Therefore, arranging joint life insurance is usually carried out between those who are dependant financially on one another.

The application process for joint life insurance if you're not married, is identical to those who are.

Joint life insurance after divorce

Unfortunately, relationship breakups happen, but did you know usually a joint life insurance policy can't be divided?

Only a small number of insurers provide the option to split a life insurance policy or to remove one party making it into a single policy.

If your insurer doesn’t provide this option either an agreement has to be reached in order to continue the life insurance or the policy is cancelled.

However, reaching an agreement can be difficult depending on how amicable the break-up is.

It poses questions such as:

  • Who pays into the policy?
  • How much should each party contribute?
  • Who is entitled to the pay out if either party remarries?
  • What if one party has further children?

If the policy has been written into trust, you could also face further complications.

If written into an absolute trust it's very unlikely you can change the details, such as the named beneficiaries, meaning if your ex-spouse was named, they would receive the pay out upon your death.

However, if you have a flexible or discretionary trust you should be able to make the required changes, post-divorce.

If it’s decided that the policy is to be cancelled, all of the premiums which have been paid in will be lost.

What’s more, both parties will then need to find new cover with increased premiums (due to being older) or risk leaving themselves uninsured.

If you find yourself in this position, get in contact with an independent life insurance broker who can help you find the best solution.

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Joint life insurance for business partners

Taking out a joint life insurance with a business partner offers protection for the business to remain functioning should the worst happen to either party.

Whilst a joint policy may not be the best option for couples (particularly with children) as only one pay out is provided, this may not be the case for business partners.

The pay out could be used to pay off business loans, invest in new a partnership or even to maintain the running costs of the business.

Joint life insurance in trust

Writing your life insurance in trust passes the rights to your policy over to a trustee, (similar to the executor of a will).

This detaches the policy proceeds from your estate and brings with it 3 main benefits:

  • Avoids/ reduces inheritance tax (40% over £325,000)
  • Bypasses the probate process
  • Provides you the opportunity to detail how you wish the proceeds to be divided

When writing a joint life insurance in trust, it's important both parties agree on how they wish for the proceeds to be spent.

When writing a joint life insurance policy in trust it's commonplace for both parties to detail each other as the main beneficiary.

At Reassured, we offer a free trust writing service on the majority of the policies we arrange, ensuring peace of mind that the process has been completed accurately.

Critical illness cover

All term-based policies arranged through Reassured come with the option to include critical illness cover.

This means, if you're diagnosed with a serious, yet not life-threatening illness, you can make a claim.

The pay out could be used to make necessary adaptations to your home, replace a lost income or simply enjoy with family.

The cost of critical illness cover is also based on the likelihood of a claim.

Therefore, if either partner experiences high-risk factors, it could result in the other partner paying over the odds for their critical illness cover.

To secure the best deal, contact Reassured and allow us to compare critical illness quotes on your behalf.

Terminal illness cover

All life insurance policies, arranged through Reassured, come with terminal illness cover as standard.

This means, if you're diagnosed with a terminal illness, and given less than 12 months to live, you can make an early claim on your policy.

This pay out could be used to get your financial affairs in order, pay for private medical treatment or simply enjoy your final days with loved ones.

Once a claim has been made, cover expires, leaving the un-ill partner uninsured.

Joint funeral plans

A joint funeral plan can secure the cost of a funeral at today’s prices and only involves making one set of payments.

If you’re only looking to cover your funeral, or are unable to obtain life insurance, taking out a prepaid plan can secure the cost of your funeral at today’s rate.

Similar to joint life insurance, it’s possible to take out a joint funeral plan which will cover two people simultaneously.

This is again cheaper than paying for two single funeral plans but will only pay for one funeral.

Once the funeral plan has paid out, it’s no longer valid, leaving the remaining partner (or more likely their loved ones) to fund the second funeral.

Whilst the estate or savings can be used to fund the second funeral, these proceeds will have to go through probate, probably requiring loved ones to pay out before they can be reimbursed.

For this reason, it’s likely to be most beneficial to take out two funeral plans, to ensure both partners funerals are secured at today’s prices.

If you would like to obtain a quote on individual funeral plans, or simply understand the options available, get in touch.

Compare joint life insurance quotes

Choosing whether to go for a single or joint life insurance policy is a very subjective decision.

Generally speaking, and if budget allows, two single policies offer much greater financial protection.

If you’re still unsure of the best option to take, getting in touch with an FCA registered life insurance broker, like Reassured, could help.

Whichever option you choose, the best way to secure the right policy, at the cheapest price, is to compare multiple quotes.

Why not save yourself both time and money and let us search the market for you.

And the best bit is, there’s absolutely no fee for using our award-winning service.

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Sources:

[1] https://www.moneysupermarket.com/life-insurance/single-vs-joint/

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