Joint Bank Account ✓ Joint Mortgage ✓ Joint Life insurance?

This is a guest post from award-winning broker; Reassured.

Whether married or in a serious relationship, it is not uncommon in today’s society to share many of the important elements in life such as having a joint bank account or mortgage.

Therefore, when arranging life insurance, it seems only common sense to share this also and arrange a joint policy.

But is this the right thing to do?

Having adequate life insurance in place can help secure the financial future of your loved ones.

A lump sum pay out could be used to pay off the remaining balance of the mortgage, cover debt in your name, replace lost income or pay for the cost of your funeral.

All aspects your loved ones may struggle to cover without the additional financial support.

Arranging a joint life insurance policy, as opposed to two singles, can save up to 30% each month.

But it does come with some draw backs.

Most joint life insurance policies will pay out upon first death, resulting in the surviving partner receiving the lump sum pay out.

This could be ideal if your only purpose for arranging cover was to cover the cost of your mortgage and you have no dependants other than each other.

However, upon pay out, your life insurance cover will expire.

This means that if the surviving partner still requires cover for the purpose of other dependants, such as children, they will be required to arrange new cover at an older age.

The cost of life insurance premiums is calculated based on the level of risk you pose to the insurer.

As a result, the older you are the more likely you are to make a claim, meaning that if you are required to arrange new cover at an older age because your joint policy has expired, your premiums will be higher.

Furthermore, unfortunately in today’s society the number of divorces and relationship breakdowns has increased.

Splitting a joint policy into two singles is not something a large number of insurers offer, again meaning that if you require cover upon a break up, you may need to arrange a new policy at an older age and end up paying a higher premium as a result.

Life insurance is commonly arranged to offer protection for your children if you were no longer around to support them financially.

However, it is important to remember that with joint life insurance, only one pay out will be made.

This means that if both parents were to pass away in a freak accident, the sum assured wouldn’t be doubled to cover both deaths.

Whilst the sum assured may be sufficient enough to meet the financial needs if one person were to pass away, it may not be enough to cover the financial void of losing two parents simultaneously.

Life insurance comes in a variety of types; term, whole of life, over 50s and family income benefit.

However, due to a pay out being guaranteed with both whole of life and over 50s, it is not possible to obtain a joint policy for these types of cover.

The type of cover you arrange will depend on your own individual needs.

All of these points may make joint life insurance appear less appealing, however, reverting back to the point that it can be significantly cheaper, if your budget doesn’t allow you to have two single policies, having some cover in place is better than none.

How to secure your lowest life insurance premium

The cost of life insurance can vary significantly between insurers, therefore, whilst you may think your only option is a joint policy due to budget restrictions you may be pleasantly surprised upon comparing multiple quotes.

There are a number of ways to do this to ensure you get the best possible deal.

You could carry out the research yourself, comparing individual quotes from insurers, although this can be very time consuming and confusing at times due to industry jargon.

Alternatively, you could you a price comparison website which will generate multiple quotes on your behalf. Again this does require some knowledge of the industry jargon to ensure you are getting the level of cover you require at the best price.

Finally, you could use an independent FCA registered life insurance broker. They don’t tend to charge you for their services and will provide you with all the information, knowledge and quotes you need to make an informed decision on the right solution for you.

Whichever option you choose, the most important thing is to make sure your loved ones have protection in place whatever the future may hold.

*This is a collaborative post.