Joint Life Insurance

Joint life insurance is a policy which is taken to cover the life of two peoples together rather than taking up single policy in each name. It is taken in the name of two people and hence is cost effective. In this kind of coverage the lump sum amount is paid after the first death and the coverage ends while in some case both the death are insured and the benefit is paid to the beneficiaries.

The most common financial partner will include:

  • Husband and wife (any mortgage and children as beneficiary)
  • Partners like civil partner, live-in partner and the beneficiary would be children and mortgage
  • Roommate and the only beneficiary can be mortgage

The joint insurance policy lands in trouble when the relationship ends or divorce happens between the couple. It is very difficult to divide the policy between two especially when they go into different relationships. In this case the policy mostly ends and mostly in the case when one of the two insured stops the payment of the premium. In this case it is favored to buy two single life insurance policy so that there would be two different pay outs, one for each of the policies

There are different types of life insurances that you can get along with joint insurances:

  • Level Term Insurance – In this the insured chooses to end the policy when the financial responsibility of their partner reduces or is nil, like when the children dependency gets over. In this the amount for which the insured is covered remains the same for the entire term.
  • Level term Insurance along with coverage for critical illness – In this type of insurance that covers both life as well as critical illness. One needs to check if they cover the life insurance after paying out for critical illness. Most of the companies cover heart attack, stroke and cancer as critical illness.
  • Decreasing term life insurance and Decreasing term life insurance with critical illness- In this the covered amount decreases with the decrease in the term of coverage while the one with critical illness pay out if the partner is diagnosed with some critical illness.
  • Whole-of life insurance is a type of insurance in which the person is covered for whole of their life and most of the company do not allow joint insurances and the term ends once with the death of any one of the partners.