Joint or separate life insurance


Learn about the differences between joint and individual life insurance policies and find out which one might be best for you and your family.

What is a joint life insurance policy?

It’s not a topic people like to think about, but would your family be able to cope financially if you or your partner died? Many people choose to take out a life insurance policy to cover their mortgage payments or to make sure dependents are insured should the worst happen.

For those with a common financial interest, like a joint mortgage or parenting responsibilities, a joint life insurance policy might be an option, meaning two people are insured on one policy. There is only one monthly premium to pay and the policy will be paid in the event of the death of either insured.

This approach can make financial sense for many couples, as the monthly cost is usually low and it is easy to set up and manage a single policy. Although joint life insurance policies are popular with couples, the policies are often available for two people who are financially related.

How do joint and individual policies differ?

Joint life insurance

It is important to understand that joint life insurance policies generally only pay for the first death. Once a partner dies, the remaining person on the policy is no longer covered. If the surviving policyholder still wishes to be covered, he will have to take out a new contract.

If many years have passed since the start of the joint contract, the surviving policyholder will likely find that the cost of the life insurance has increased due to his age or if he has had health problems since quitting. ‘he took out his joint contract.

In the unlikely event that both policyholders died at the same time, there would be only one payment to the beneficiaries. If you decide to purchase a joint policy and you have young dependents or a large mortgage, you should carefully consider the financial impact this would have and make sure you have sufficient insurance for the worst-case scenario.

Individual life insurance

While joint life coverage may be the best option for many couples, purchasing two separate life insurance policies can provide more flexibility and ensure that your beneficiaries receive payment for each death.

Separate policies allow you to insure each person for a different amount if necessary. You may wish to purchase a higher level of insurance for the higher income of the family, as her death would be more likely to have a major financial impact. The lower income can then purchase a separate policy for a smaller amount, which will likely result in a lower monthly premium.

It is important to make sure that both partners are covered, as family income would still be affected if the lower / unpaid wage died – take into account the additional cost of childcare or the resulting change in arrangements. working arrangements for other family members.

Separate policies can also be advantageous for partners when a person has another form of existing life insurance coverage, for example if they are receiving an on-the-job death benefit. They can choose to ‘top up’ their existing coverage if necessary, while the other partner can insure for a larger amount.

Joint or individual life insurance: which is better?

The best type of life insurance coverage will depend on your situation – many people will find that a joint life insurance policy is the best option for them, as monthly premiums are generally low and it is easy to manage a life insurance policy. only font.

Some couples may choose to purchase a joint policy if they are relatively young and both insureds are unlikely to die, so the survivor could purchase another policy later if necessary.

However, others will appreciate the flexibility and added protection of purchasing two separate life insurance policies.

For many, the price difference between the two policies will be a deciding factor. Since two separate policies provide more coverage, this approach will often be more expensive, but the price difference can be minimal and could mean the difference between financial problems and a secure future for your dependents.

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