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Last updated: 03 June 2021
You will usually pay a monthly sum towards your insurance policy. The amount you pay each month depends on a variety of factors such as your age, job, health and lifestyle choices such as smoking and exercise.
If you are over 60 then your monthly premiums are likely to be higher, so it is important to look into your most cost-effective option. Often a joint policy will be cheaper than two separate single life insurance policies, but it is a good idea to look into this as it differs depending on your situation.
A single insurance policy will cover one person, so if one of you dies then your insurance company will pay the agreed amount to you. This will usually cover whichever one of you dies first.
You could both take out a single life insurance policy, but you need to think carefully about whether a joint policy could be more financially viable than two separate single life insurance policies. It is possible to find cost-effective single life insurance cover for both of you, so it is worth comparing both options.
Bear in mind that your single life insurance policy may cost more or less than your partners depending on the factors discussed such as age and health.
Joint life insurance cover applies to two people so the payout when one of you passes away works differently to a single life insurance policy. Often a joint policy will only pay out when the first partner dies, but you may be able to find a policy which provides two payouts after each partner dies.
Although this payout will usually be offered when the first partner dies, you are usually able to decide whether you would prefer for your family to take it later on once both of you have passed away.
The main issue with joint life insurance is that there is only one payout. This means that unless they take out a new policy, the remaining living partner won’t be leaving any cover for anyone who is dependent on them when they pass away. If you still have children, parents or other family members who are dependent on you when you die then it is important to think about what kind of support you want to leave them.
It is important to note that after the first partner dies, the remaining partner no longer has any life insurance. If, as the remaining partner, you then try to take out an insurance policy for yourself, it is likely to be more expensive because you will be older than when you took out your first policy.
It is important that you find the insurance policy that suits the needs of both you and your partner. You need to compare the pros and cons of each option carefully before making a decision. There are some essential factors you need to bear in mind when choosing.
Firstly, you need to think about what you need from the payout in the event of one of you passing away. What would your partner need the money for after you are gone? You need to think about how much you need the payout to be to support your remaining partner and any other dependents you have.
If they will have the responsibility of paying important monthly sums such as a mortgage, then your level of cover will probably have to be higher and you may have to get a specific mortgage life insurance policy, or decreasing term life insurance.
Next, how much are you able to spend on your policy? Review your current financial situation and look at how much you can afford to spend on the monthly payments. A joint policy may be more feasible, but it comes with its disadvantages so weighing up the costs and benefits of your decision is essential.
If there is a main wage earner in your house, then a joint life insurance policy could be ideal for you. The death of the main wage earner is more likely to have a larger financial consequence for your family, so you are likely to receive a bigger payout when they die.
However, two single life insurance policies would make more sense if both of you earn similar amounts. It may be more expensive, but it would mean that when either of your incomes are lost, the payouts would reduce the impact on the people who are dependent on you by compensating for the loss of half of the household income.
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