Instead of taking out two different individual life insurance policies for both you and your partner. You can take out a joint life insurance policy which is a combined life insurance policy for both of you.
Much like any other life insurance policy, joint life insurance will pay out should one of you die.
Why should I choose a joint life insurance policy instead of taking two different policies for my partner and me?
The most significant edge to a joint life insurance policy is the fact that it is generally cheaper than taking out two different life insurance policies.
Several factors are essential for the design of your premiums, such as age, health, lifestyle habits, etc.
The premiums can be 10 to 20 per cent lower, which inevitably becomes more significant with time.
Should I consider taking out joint life insurance for my children?
To discern the consequence of taking out joint life insurance for your children, you must first consider the two different payout options that the policy has to offer.
- The policy will pay out immediately after the death of any of the two participating policyholders.
- The beneficiary assigned generally happens to be the second partner.
- This payout option makes the joint life insurance policy sort of like single life insurance where the payout occurs should one of you die rather than a person.
- This joint life insurance policy pays out only when both policyholders die.
- This is a better option if you wish to pass a more substantial estate on to your children should you die.
- Second death joint life insurance policies are quite like a whole life insurance policy.
- The premiums are higher, but that is understandable because of a greater sense of financial security that your children will receive.
From the above discussion, it is apparent that a joint life insurance policy is undoubtedly a great security blanket for your children if you choose the second death payout option.
Cost of a joint life insurance
The cost of joint life insurance depends on you and your partner’s age, where you live, the extent of the security you prefer, your family lifestyle, and medical history.
While being cheaper as compared to two individual life insurances a joint life insurance has the following additional benefits
- The policy is not only available to married couples but can be availed by people in long term personal or business relationships.
- The policy pays the lump sum no matter who dies first.
- It provides the comfort of knowing one’s family will have financial security in their absence.
However, the major drawback of joint life insurance is the single payout, even if both policyholders die at the same time, and applying for single life insurance after the death of your partner may prove challenging.
Should You Invest In Joint Insurance Policy?
There are a few downsides of joint insurance policy UK. When one of the spouses dies first, the other gets the payout. It may be too late to start a new single policy after your spouse bids adieu to the world.
Discuss the pros and cons of the policy with your partner. No matter how old you are, investing in a life insurance policy is always a wise idea.