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What is joint life insurance?
A joint life insurance policy is an alternative to couples each taking out a policy of their own.
Joint life insurance covers two people in the same policy, whereas single life insurance only covers one individual. Joint policies are generally most suitable for long-term couples, both married and unmarried, but they are also commonly used by business partners too. Generally speaking, when one of the two people covered by a joint life insurance policy dies, the policy comes to an end and the surviving person receives a final payout from the policy. In the vast majority of cases, tax insurance payouts are tax-free, which means there is one less thing for you to worry about should the worst happen.
What are the advantages of joint life insurance?
There are numerous benefits that come with choosing joint life insurance, they include:
Joint life insurance policies enable both partners to contribute on an equal basis. This is particularly important now that many families have two breadwinners, where the loss of either partner’s income could create significant financial issues.
Of course, even if one partner is not working, losing them could mean extra financial pressure is placed on the surviving party to find the money for extra expenses such as childcare, and having a joint life insurance policy would still be a huge help.
Buying joint life insurance is often cheaper than buying two single policies because there are fewer overheads involved. So, if your family is on a tight budget, it could be advantageous to combine your policies into one.
It is often the case that because you have already stated who will benefit from your policy should you pass away - the joint policyholder - payouts can be made much faster than they might be if you had a single policy.
Can be written into trust
A joint life insurance policy can be written into trust. This means that, should you wish to ensure that your life insurance policy goes to your partner or your children, should you both pass away, you can legally do so. Setting up a trust is generally very affordable (and can sometimes even be free) but you should talk to your insurer about it at the point of setting up your life insurance because it is not always appropriate.
When would joint life insurance be used?
Life insurance is there to ensure that any dependants you may have do not suffer any financial difficulties should you die. Traditionally, it was the main breadwinner who would take out a life insurance policy to protect their partner and children. Today, of course, many families have two breadwinners, and that is why the joint life insurance policy is growing in popularity. There’s also the fact that the loss of a stay-at-home parent could mean an increase in family expenses to consider too. Should one partner die, the other will be solely responsible for all aspects of family life including childcare costs, and this could cause financial difficulties.
If you have a first death joint life insurance policy, should you pass away, your partner will receive a payout to help them deal with the financial side of life and the policy will then be terminated. If, on the other hand, you happen to have a second death policy - which is far less common- a payout will be due when each partner covered by the joint life insurance policy passes away. This is providing, of course, that all premiums have been paid.
Payouts can typically be made in a lump sum or as regular smaller payments depending on what would be best for you and your family.
Outside of family life, it is not uncommon for business partners to take out joint life insurance as a pair. They usually do this because their finances are usually closely linked and the death of one could result in financial issues for the other. Should one partner pass away, a joint insurance policy will kick in and work in much the same way as it would for a family member.
Here at Discount Life Cover, we offer a wide range of joint insurance policies at unbeatable prices. We search the whole market to ensure that you will get the best possible deal available. Get a quick quote today and start your policy for complete peace of mind or give us a call on 0207 112 8844 - we are always on hand to talk you through the process.
Discount Life Insurance…Why Use Us
We are an online advice service and as such have little overheads which enables us to give away more commission enabling us to me extremely competitive on price.
Having said all this, life insurance is not always about price and there are differences in the types of cover offered by providers. So we also provide an “advised sale” which means that we take on responsibility to make sure the policy you take is the right one and the most suitable for your circumstances.