If you’re looking to get a life insurance policy and you’re in a committed long-term relationship, you may well have considered the benefits of a joint insurance policy as opposed to two single ones.
There are reasons why this could be a good idea, and others why it might make more sense to keep your policies separate. To help you decide, here is a brief guide to the potential pros and cons of both.
Joint life insurance policy
Joint life insurance policy – as the name suggests – insures two lives instead of one, usually paying out when the first of the two passes away. It can make a lot of sense in terms of simplifying your monthly outgoings, and in some cases may be more affordable than two single policies. You will usually need to prove that you have a recognised financial interest in order to qualify for this policy – such as marriage or civil partnership, a shared mortgage or dependent children.
The potential downside of a joint policy is that it may not take into account the same factors as two separate policies would – for example if there is an age difference, or one of the two policy holders is in better health than the other, meaning the value of your cash sum could be less than it might be, or your premiums higher than they need to be.
Also, in some cases the policy may expire when the first person dies, meaning the surviving partner might need to buy insurance again. If the surviving partner is by this time considerably older than when the joint policy was taken out, he or she may find that it’s more difficult to secure good value insurance without paying higher premiums.
Standard life insurance
With standard life insurance, you can find a policy that reflects your unique circumstances including your age, health and income. You can also be assured that you’re covered for life if your policy is an on-going rather than fixed-term contract. You and your partner could even approach different insurers if your circumstances are different enough to warrant it. For example if there is an age gap, one partner might benefit from using a specialist in over 50s insurance, which the other may not be eligible for. There is also the possibility that your partnership may come to an end for some reason, in which case it may no longer make sense to have joint insurance.
Ultimately, there’s no definitive right answer when it comes to choosing the right insurance policy. But by working together with your partner to ensure you both have cover that provides for all your needs and reflects your circumstances both as individuals and as a family, you can be sure of valuable peace of mind in the future.
With both single and joint RIAS life insurance policies you won’t be asked questions about your or your partner’s health, get in touch with your GP, or ask you to take a medical examination.