Life Insurance

Pros and cons of joint life insurance

· 6 min read

If you’re sharing your life with someone, it might be tempting to get joint life insurance. It can be a cost-effective choice for many, but there are potential pros and cons to consider. Is it a better option than a single life insurance policy?


If you’re sharing your life with someone, it might be tempting to get joint life insurance. It can be a cost-effective choice for many, but there are potential pros and cons to consider. Is it a better option than a single life insurance policy?

What is joint life insurance?

Before looking at the benefits and possible drawbacks, it's a good idea to take a moment to understand what joint life insurance is. As the name suggests, a joint life insurance policy covers two people on a single plan. The big difference compared to a single life insurance policy is the way the policy pays out.

A joint life insurance policy typically only pays out once. When the payment happens depends on the type of policy you choose. The most common options are:

  • A policy that pays out at the first death – The policy pays out on the first death, no matter which policyholder dies first. If you have a joint policy with your spouse and they die first, the policy will pay out, and you will no longer have life cover. These are the most common types of joint life insurance policies.
  • A policy that pays out on the second death – The policy only pays out once both policyholders have died. People typically use these for tax and estate planning purposes rather than to provide financial protection to dependants.

Compare this with a single policy. Single life insurance pays whenever the policyholder dies within the terms of the policy. If you and your partner have individual life insurance plans, your beneficiaries will receive two pay-outs.

Like single life insurance, the cost of your joint policy depends on multiple factors. These include:

  • The age of you and the other policyholder
  • Your health and lifestyle
  • Your profession

You can also opt for permanent and term life insurance policies with joint policies. You can read more about choosing life insurance from our previous article explaining the difference between permanent and term life insurance.

What are the pros of joint life insurance?

Ease of finding and maintaining the policy

Having a joint policy instead of two separate ones is easier in terms of managing the paperwork. You simply have to shop around and compare different joint policies to find one that works for both of you. It might take longer to find the right individual policy because you need to look for two policies that meet your varying needs.

The cost

Having a joint life insurance policy typically results in cheaper premiums. If you take two separate policies, you’ll end up paying more. The cost of a joint life insurance policy can be especially affordable in situations where one person might be ‘more expensive to insure’. For example, if one of you smokes, you could find a joint policy cheaper than trying to cover the smoker on an individual policy. 

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The financial support in special cases

Joint life insurance tends to be a good option if one of you is a caregiver. You shouldn't underestimate the potential financial impact of the death of a caregiver. With a joint policy, you might find it easier to sort out new caregiving arrangements. You should always consider the surviving partner's financial needs when taking out life insurance. Joint policies can be beneficial in situations where caregiving is a factor.

What are the cons of joint life insurance?

Only one pay-out

As mentioned, the joint policy only pays-out once, either at the first or the second death. If you opt for the first death policy, then the remaining person won’t have life insurance any longer. If they want to get life insurance, they could find it more costly and difficult, as they might be older at this point.

If the pay-out happens only after the second death, you need to be aware of what it means to finances after the first death. You won’t receive any extra money you might need to cover the additional costs at this point. That is why second-death life insurance policies are often used only for tax purposes and not to cover things like mortgage payments.

No flexibility in the level of cover

It’s also important to note that a joint policy doesn’t provide much flexibility around your coverage level. Joint policies always have a set, single level of cover which tries to find a compromise in terms of the financial pay-out.

Compare this to individual life insurance policies, where you can choose different levels of cover. For example, if one of you is the clear breadwinner, that life insurance policy can pay more to ensure enough financial support for the other person. With a joint policy, you won’t receive any more or less depending on which policyholder dies first.

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What if the relationship breaks down?

One more important thing to keep in mind is what happens if your relationship breaks down. A joint life insurance policy is typically taken when you’re married or in a long-term relationship. But life and love don't always follow a plan, and you could find your relationship ending.

Some insurers can split a joint policy into two single policies. However, it tends to come with an increase in your monthly premiums. You might also find your insurer unable to do that. In these situations, you’d have to cancel the policy and take separate life insurance policies. You could potentially lose out financially.

Is joint life insurance the right for you?

Joint life insurance can be a cost- and time-efficient way to sort out your life insurance policies. For many couples in committed relationships, it’s worth considering. However, be aware that a joint policy only pays out once and consider how a breakup might complicate things further. Ultimately, the decision depends on your circumstances.

What to read next...

The main thing is always to shop around when you are thinking about life insurance. Comparing different life insurance options online can help you understand what policies would work for you. If you are feeling unsure about the best option, you can always talk to a financial advisor.

Krista Lomu
Krista Lomu
Krista has been writing about finance for nearly a decade. Based in London, she hopes to turn even the most complicated topics to approachable and interesting for readers. When she's not writing and working with small businesses, she likes to read, watch football and play games - fuelled on by many cups of coffee!
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