Joint life insurance
Many people take out a life insurance policy to make sure that if they die, their loved ones will be able to financially support themselves. It is also common for those in relationships or marriages to opt to take out a joint life insurance policy. It is clear to see why many people choose to do this, it seems like the sensible option in many ways. However this is not always the case, often these joint policies have more negatives than positives and people can be better off choosing two single policies instead.
One of the best ways to find out if you are going to get a good deal on your life insurance is comparing the different plans out there on the market. Just as with any purchase, it is important to shop around and see what's on offer before you commit yourself to one product. Here at our website we offer a free and impartial life insurance comparison service that is designed to help you determine which life insurance policy is right for you. By showing you the deals on offer we aim to aid you in making an informed decision on your choice.
In This Guide:
A single policy
Having two single policies is not often considered by people in relationships with the same dependents but there are some clear advantages to having your life insurance set up in this way. One of the biggest advantages of having two separate life insurance policies as a couple, is the fact that if you claim on one of the policies, the other one remains intact. This means that even if one of you should die, the other will be able to remain covered without having to take out a new plan at increased rates. Another benefit of taking out more than one policy is the fact that there will be two payouts. This means that you can probably expect the sum paid out to be higher than it would be if you were on a joint plan. Having two policies also allows you to insure different amounts for each person. This means that if one of you is the main source of income, you can insure a larger sum on your plan. This is because your family will suffer a higher financial shortfall if you are the one who passes away.
Downsides of joint policies
One thing that people must remember when taking out a joint policy is that there will only be one sum paid out. This means that both policy holders were to die at once, there would only be one payout for the two of them. This means that the amount paid is normally lower for a joint policy than it would be for two policies. Joint policies work on a "first death" basis, this means that the plan will only payout on the first person to die. As a result of this, the remaining person will no longer be covered and it will undoubtedly be much more expensive for them to take out a new plan due to their increased age.
Another problem with joint policies is that once you sign up for one, you can't get any of the money back if you want to cancel the policy. This means that if your relationship breaks down and you end up separating with your partner, you will lose all the money that you have paid into the plan. This is because the policy can't be "split" down the middle. However, if you have two separate life insurance policies, neither will be affected in the event of a split with your other half.