Single and joint life insurance policies each have their own advantages and disadvantages.
Understanding the key differences between the two types of life insurance is important when it comes to choosing the best option for you and your family’s needs.
Single life insurance
Single life insurance covers a single person, usually the primary earner of the family. It pays out a lump sum when the insured party dies, allowing the family to keep their current lifestyle and providing a financial cushion.
Joint Life Insurance
Joint life insurance is similar to single life insurance, except it is taken out by two people, such as spouses, long-term partners or business partners.
The idea of this policy is to protect each member of the policy in the event of death. A payout could be paid to the alternative policyholder should one person pass away, or a lump sum will be provided to family members.
Joint life insurance comes in two types:
First death policies: This type of policy covers two people until one policyholder dies. When this happens, the lump sum is then payable to the second person on the policy. Once this happens, the policy will end, potentially resulting in a lack of coverage for the surviving person who may wish to get a new single life policy for themselves moving forwards.
Second death policies: The terms of this policy are different, as the payout will only be payable once both policyholders die, no matter how far apart this could be. Should one person pass away, the beneficiaries won’t get a payout. This policy is often chosen as a way of supporting children if the worst was to happen.
Selecting the right type of life insurance is an important decision, as it can provide financial security for you and your family during difficult times. Both single and joint life insurance policies have their advantages and disadvantages, so it’s important to consider your budget, current life stage and any pre-existing medical conditions before choosing which policy is best for you.