Joint Life Insurance

Helping you protect all the things you work hard for...

Drewberry™ provide pensions, investment and insurance advice for Money to the Masses readers throughout the UK.

 

Why Joint Life Insurance?

 

Joint Life Cover is designed to pay out a cash lump sum to the surviving partner should either of you pass away.

 

Life Insurance for couples provides you and your partner with peace of mind knowing you are both financially protected should the worst happen.

 

Include Critical Illness Insurance to provide a cash lump sum should you suffer a serious illness such as cancer.

What is it for?
 

What Does Joint Life Insurance Cover?

On Death

Should you or your partner die during the life of the policy it will pay out a lump sum benefit to the surviving partner. It is important to note that joint life cover usually pays out on the first event only and then the policy terminates.

Terminal Illness

Now included in most policies, Terminal Illness Cover pays out your benefit early if you are diagnosed with less than 12 months to live.

Critical Illness Cover

In addition to paying out on death you can financially protect yourself against the risk of serious illnesses such as heart attack, cancer and stroke.

What does it cover?
 

How Does Couple's Life Cover Work?

Stage 1:
You or your partner die during the term of your Joint Life Insurance policy.

Stage 2:
The surviving polyholder makes a claim with the insurer including the deceased’s death certificate as evidence.

Stage 3:
The insurer pays a lump sum equal to the sum assured to the surviving partner, either directly or potentially into trust depending on how you set up the policy.

Stage 4:
The surviving partner can use these funds however they see fit. Many use it to pay off any outstanding debts including their mortgage.

How does it work?
 

Why Joint Life Insurance?

Although Life Insurance for couples is not compulsory it is worth considering this plan if either partner would suffer financial hardship should the other pass away.

This is common if you have a joint mortgage together, for instance, where one party would struggle to keep up with the repayments without their partner.

What is the risk of passing away?

Based on ONS life expectancy data (2008-10), the chances of someone passing away in the next 10 years are as follows:

30 years old

40 years old

50 years old

1 in 112

1 in 53

1 in 23

Do I need cover?
 

Your Key Options

Choose your level of cover
In the event of either partner passing away you want to avoid the surviving partner suffering any financial hardship. Some couples opt to protect only their mortgage where others consider additional cover to meet other expenses.

Choose your length of cover
You will want to look to align your policy with a time when many of your financial liabilities cease. This could when your mortgage ends.

Level or decreasing cover?
Both options are available as with an individual life policy. What you choose will depend on what you and your partner are looking to protect. A level policy will see the benefit stay fixed throughout the policy term, while a decreasing policy will fall over time, perhaps alongside a mortgage.

What are my options?
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Joint Life Insurance explained

What is Joint Life Insurance?

Joint Life Cover is typically designed for couples who have a shared liability together, such as a mortgage. It’s there to protect both individuals and pay out should one of you pass away, with the surviving partner using the payout to clear the mortgage.

It’s important to realise that Joint Life Insurance will only ever pay out for one death, usually the first, even though both individuals are covered by the policy.

Even where there is no mortgage, Joint Life Insurance can protect against a situation where one half of the couple would struggle to survive financially without the input of the other were the worst to happen.

As with individual policies you have many factors to consider when structuring a joint plan, including whether to choose Level Life Insurance or Decreasing Life Insurance and if you want to add Critical Illness Cover.

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Do We Need Joint Life Insurance?

How would your partner and family cope if you were to pass away?

Could they survive without your income and keep up with all the bills and other household expenditure including, perhaps most importantly, the mortgage?

These days many households have two people earning a wage and contributing to the household finances, which means the loss of one of these incomes could prove financially disastrous.

why joint life insurance?

This could especially be the case if you have a joint mortgage and the surviving partner would struggle to continue to meet the monthly mortgage repayments on their own.

Don’t underestimate the value of a stay at home parent…

Even where one half of the couple doesn’t work and instead stays home to take care of children, for instance, you would need to ask yourself how the surviving, working partner would cope with running a household and raising children as well as continuing to bring in an income.

Joint Life Insurance pays out a cash lump sum to a surviving partner so that liabilities such as a mortgage can be repaid and the family can continue to meet other vital living expenses. Where one partner stays at home to look after children, the benefit could be used to cover childcare expenses should anything happen to them so the surviving partner can continue working.

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Victoria swiftly helped in finding a solution which offered the required cover, with a more competitive premium.

Doug Harvey
05/09/2018
Joint life protection insurance

What Does a Joint Life Plan Cover?

Joint Life Insurance covers a two individuals under a single policy, paying out a cash lump sum should either party pass away. You agree on the sum assured with your insurer beforehand, typically carefully aligning this with your mortgage, other liabilities or general income needs.

ciaran king, independent protection expert at drewberry

There are many different factors to consider when setting up Joint Life Insurance for couples with some of the most common detailed below.

To ensure you take out the most suitable cover it is always worth having a chat with an expert to ensure you have considered all your options. Please don’t hesitate to pop us a call on 02084327333.

Ciaran King
Independent Protection Expert at Drewberry

 

Level or Decreasing Term Joint Life Insurance?

Broadly speaking, the two most common types of Life Insurance on the market are:

Level Life Insurance sees the benefit remain fixed over the life of the policy. There’s the potential to link this to inflation, so your cover won’t ever be eroded in real terms over the length of the plan. It’s most commonly used for family protection purposes over and above the mortgage to ensure there’ll always be a fixed lump sum to help your family should the worst happen.

Life Insurance Graph

Given the benefit remains fixed over the life of the policy, these policies are also used to cover interest-only mortgages, where the overall outstanding liability doesn’t fall with time.

Decreasing Term Life Insurance, on the other hand, sees the benefit fall over the policy’s term. As the benefit you’ll receive goes down across the life of the policy, this is a cheaper form of Life Insurance. It’s most commonly used to cover a repayment mortgage, where the outstanding liability falls over time.

 

Family Income Benefit

Family Income Benefit is an alternative form of life insurance where the benefit payments are spread out into monthly or annual payments should a claim arise rather than providing a single lump sum.

Each month for the rest of the policy term, the beneficiaries receive an amount you agreed upon with your insurer so they can keep up with their daily living expenses without your income. The benefit is most often used to pay for bills, housing costs, groceries, school fees and any other everyday expenses your family would need to meet without you.

 

Joint Whole of Life Cover

Unlike Joint Term Insurance, Joint Whole of Life Cover is designed to protect individuals for their whole lives rather than just a set term, as long as you keep paying the premiums.

Given that it lasts for your entire life, it’s typically used to cover an expense that will definitely occur on your death, such as paying for a funeral or meeting an inheritance tax bill.

 

Joint Critical Illness Cover and Life Insurance

As with an individual policy you add Critical Illness Cover to Joint Life Insurance to protect against the risk of you suffering a serious illness such as cancer, a heart attack or a stroke.

Naturally the risk of suffering a serious illness is considerably higher than passing away. As a result, adding on Joint Critical Illness Insurance to your life plan will increase your premium.

Many couples opt to include critical illness for peace of mind, knowing if either party were to suffer a serious illness there would be adequate funds to pay off the mortgage, make alterations within the home to accommodate the change in health or meet any other expenses associated with their illness.

When looking to protect yourself and your partner against ill health, it’s worth considering whether Critical Illness Cover is the best option.

You may want to consider an alternative, such as Income Protection Insurance, which will pay a monthly income instead of a single lump sum and is not limited to paying out based on a set list of conditions.

Jake Mills
Independent Protection Expert at Drewberry

 

Single or Joint Life Insurance?

The most common scenario in which individuals opt for a Joint Life Insurance policy is to cover a joint mortgage.

If there are two individuals named on the mortgage contributing to the monthly repayments it is wise to protect both parties. Where there is only a single loan we only need the insurance to pay out on the death of one partner, as that death would trigger the objective of paying a benefit to repay the mortgage.

However, although a joint policy keeps the paperwork simple it can be more cost-effective to opt for two individual policies in certain circumstances.

Imagine a policy where a couple covers £100,000 between them for a joint mortgage.

If they were to opt for two individual policies each covering £100,000 they would have twice the cover (2 x £100,000) and the premium would typically only be 10-15% higher than the joint policy.

Egle Blusiute
Independent Protection Expert at Drewberry

 

Joint Life First Death or Joint Life Second Death?

There are two ways in which Joint Life Insurance will pay out:

  • On a joint life, first death basis
  • On a joint life, second death basis.

By far the most common is joint life, first death. These are used for most Joint Mortgage Life Insurance policies as the payout occurs on the death of the first partner and therefore repays the liability.

Far less common are joint life, second death policies. These are perhaps most used for joint Whole of Life Insurance policies to cover inheritance tax, for instance, where the liability will only arise on the death of the second individual. (This assumes that, on the death of the first individual, everything passes to a spouse and is therefore typically exempt from inheritance tax.)

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Do I Need to Write Joint Life Insurance into Trust?

When you pass away, everything that you own is added together to form what’s known as your ‘estate’. If your estate is above a set threshold you may have to pay inheritance tax at 40% on the value of any assets above this threshold.

Life Insurance payouts are included in the valuation of your estate when you pass away, meaning that even a fairly modest Life Insurance policy could easily, when added to the rest of your assets, tip you over the inheritance tax threshold.

For this reason, people sometimes prefer to write their Life Insurance into trust, which pays out the benefit into a separate legal entity outside of your estate for inheritance tax purpose, bypassing inheritance tax on the payout.

writing life insurance into trust

Fortunately, however, with Joint Life Insurance the payout is typically paid straight to a surviving spouse. This eliminates the concern of inheritance tax on the benefit because transfers at death between spouses are tax-exempt. That means there’s usually less need to write the policy into trust than for a single Life Insurance policy.

Non-married couples…

If, however, you’re not married or you both were to die at the same time, you’d need to ask yourself what would happen to the money.

If you’re not married, the money might still go to your surviving partner but there’s no protection from inheritance tax provided by marriage. Inheritance tax may therefore be due on the benefit.

While a policy aligned with your mortgage may well be ‘balanced out’ by the corresponding mortgage liability when your estate is added up for inheritance tax purposes, if you’re planning to leave Life Insurance over and above your mortgage you may still have an inheritance tax issue.

samantha haffenden-angear, independent protection expert at drewberry

The inheritance tax position of a Joint Life Insurance policy depends on so many different factors, such as whether the couple is married, if they die at the same time, and how much the sum assured is.

Inheritance tax and Life Insurance trusts are a complicated area where it’s best to get expert advice.

Samantha Haffenden-Angear
Independent Protection Expert at Drewberry

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how much does joint life insurance cost?

How Much Does Joint Life Insurance Cost?

The cost of Joint Life Cover will normally be priced based on a variety of factors, with the biggest being how much you choose to insure.

While it may be tempting to insure yourself for a large amount – especially given that life insurance can be relatively cheap – consider carefully how much your family would need instead and aim not to over-insure yourself. This will only inflate the premium you pay. An adviser can discuss with you an ‘ideal’ amount of cover for your individual circumstances.

Victoria Slade
Independent Protection Expert at Drewberry

Other factors that will influence the cost of Joint Life Insurance for couples include:

  • How long you want to insure yourself for – the older you are when the policy ends, the higher the risk of you claiming and so the higher the price
  • The age of the oldest person to be insured – with Joint Life Cover, risk is priced based on the oldest individual to be covered
  • The type of cover you choose – Whole of Life Insurance, with a guaranteed payout, is typically far more expensive than a Term Insurance policy with a limited payment window
  • Optional additions – adding Critical Illness Cover to your policy, for instance, will significantly increase the cost of your cover, albeit while expanding the breadth of coverage
  • Your smoker status – smoking shortens life expectancy, so smokers are charged more for Life Insurance to compensate for the increased risk that they’ll make a claim
  • Your medical history – pre-existing or current health conditions may have an impact on the cost of your cover, with the potential for your policy to be ‘rated’ or ‘loaded’ depending on the condition and the insurer.

If one of you has a pre-existing medical condition it’s definitely worth talking to an expert independent adviser because we can use our knowledge of the whole market to find you the best Life Insurance terms for your needs.

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Best Joint Life Insurance UK

Best UK Joint Life Insurance Providers

aegon

Aegon

Aegon’s Life Insurance automatically includes accidental death benefit for the under-55s, which will pay out the lower of £250,000 or the benefit amount you applied for if you die during the application process.

  • Maximum Cover: Limit determined by underwriting
  • Maximum Entry Age: 83
  • Coverage: Joint Life, First Event / Joint Life, Second Event
  • Options: Level Term / Decreasing Term / Family Income Benefit
aviva

Aviva

Couples covered by Aviva Joint Life Insurance policies can choose different levels of cover for each person to make your policy more suitable for your needs and budget.

  • Maximum Cover: £5 million
  • Maximum Entry Age: 89
  • Coverage: Joint Life, First Event
  • Options: Level Term / Decreasing Term / Increasing Term / Whole of Life / Family Income Benefit

 

l&g

Legal & General

As part of its Life Insurance, Legal & General include Accidental Hospitalisation Benefit, which pays out £5,000 if you are in hospital with physical injuries for 28 consecutive days.

  • Maximum Cover: Limits determined by underwriting
  • Maximum Entry Age: 77
  • Coverage: Joint Life, First Event
  • Options: Level Term / Decreasing Term
liverpool victoria

Liverpool Victoria

LV has no minimum or maximum amount of cover you can apply for, only a minimum premium. This is currently £5 per month.

  • Maximum Cover: Limits determined by underwriting
  • Maximum Entry Age: 79
  • Coverage: Joint Life, First Event
  • Options: Level Term / Decreasing Term

scottish widows

Scottish Widows

With all Scottish Widows Life Insurance policies, you get access to a free nurse advice service provided by RedArc, known as Scottish Widows Care, for you and your family.

  • Maximum Cover: £25 million
  • Maximum Entry Age: 79
  • Coverage: Joint Life, First Event
  • Options: Level Term / Decreasing Term / Whole of Life / Family Income Benefit

vitality

Vitality

If you opt to include Comprehensive Serious Illness Cover alongside your Vitality’s Joint Life Insurance, you’ll be protected against the risk of up to 174 serious illnesses, including cancer, heart attacks and strokes.

  • Maximum Cover: £20 million
  • Maximum Entry Age: 75
  • Coverage: Joint life first death / joint life second death
  • Options: Level Term / Decreasing Term / Family Income Benefit / Whole of Life Cover

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get joint life cover advice

Get Expert Joint Life Insurance Advice

rob harvey, independent protection expert at drewberry

At Drewberry we help with couples’ Life Insurance needs all the time so are well-placed to help you and your partner with your requirements.

We’ve got experts on hand ready to take your call and help tailor your policy to your individual circumstances – don’t hesitate to pop us a call on 02084327333.

Rob Harvey
Independent Protection Expert at Drewberry

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Compare Top 10 UK
 Protection
Insurers
 
Takes approx. 60 seconds
Type of Policy
Level of Cover
Date of Birth
Loading your options...
Thank you for using our Quote Tool
If you need some help, just call us!
T: 02084327333
Our in-house Experts are here to provide FREE impartial advice!
Our Experts can answer all your questions
Our Experts can send you more appropriate options based on your personal circumstances

Very important if you are either Self-Employed or a Company Director.

Our online quote tool is good but our Experts are better

Oue Experts have access to far more insurers and can often find a better deal offline.

Saves you time, let our Experts do what they are best at

Frequently Asked Life Insurance Questions

 
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