The name may suggest, joint life insurance differs a little from other types of life insurance because it is for two people.

Joint life insurance usually works on a ‘first death’ basis, paying the chosen amount of cover out if the first person dies at some point during the length of the policy. This will then end the policy.

Taking out a joint life insurance policy is a particularly popular choice for married couples. It is not as common as individual life insurance, but joint life insurance is an effective way for couples to lower the cost of their policy, or to make sure their estate is protected from taxes when they die.

This policy offers two types of life insurance:

First death

A first death joint life insurance policy will pay out the chosen amount of money to the surviving spouse after their partner dies.

First death policies may be a good option for a couple who want the surviving spouse to be able to maintain a certain standard of living, helping them to avoid paying the cost of two individual life insurance policies. However, it is important to remember that this type of policy will only pay out once, leaving the surviving person without any life insurance cover.

Second death

The more common option, second death will pay a death benefit to the couple’s heirs after they have both died. This is a very popular joint life insurance policy for people who have children.

Second death policies are also beneficial to individuals who may have health problems which hinder them from getting a singular life insurance policy of their own.

In the event of divorce…

Should a couple with a joint life insurance policy decide to split, it doesn’t necessarily mean the policy will become void. Some life insurance plans can come with clauses or riders that may provide the right to split the policy into two separate ones. Bear in mind, this may not always be possible and there could be certain restrictions in how the policy is split.

This should not be constructed as advice and is guidance only.