To ensure financial security for your loved ones, life insurance is an ultimate way if you pass away. At times, if you are a couple you both wishes to get hold of life insurance policy for one another’s financial safety or for any of their loved ones. In these cases, you may get confused if you should choose single policy or joint policy to cover both of you.
A single life insurance cover will only secure one person, and when that person passes away the policy amount will be given to the person chosen by the policy holder. However, in the case of joint life insurance, the cover will be applied to both people holding the policy and the total payment amount will be handle in a slightly different manner.
There is one more thing to think about carefully when talking about joint policies. The joint policy comes in two forms: first-to-die and second-to-die. The first-to-die policies pay the amount of claim once the first member of the couple dies. So, if any of the partner passes away during the term of your insurance policy, the insurer will pay the claim. The second-to-die policies will pay the amount due only when the second person passes too. Therefore, at times it is also called survivorship policies, the death benefit for these policies is paid out once both the policyholders will pass away.
Mostly, people consider first-to-die policies as they act more as ‘income replacement’ policies like how the traditional term insurance policies works. Looking at any policy, we just can tell that any specific is best for all because, every person has different suitable policy. Joint policies are considered better for couple however, in some cases the single policies are recommended too.
The Pros of Joint Life Insurance:
The most highlighted benefit of joint policies is affordability. Since, it is cheaper for the insurance companies for your insurer to underwrite two people at once compared to the two people individually. Additionally, if you have joint policy and both of you die during the term of the policy, the amount compensated will be much higher than the amount compensated for the individual beings.
The Cons of Joint Life Insurance:
Firstly, the chances of both the individuals to die at the same time if quite rare. Another downside of having the joint policy is that if the relationship breaks down, you can’t simply split the policy between the both members. Usually in such cases the whole policy is ceased which means no return instead loss of all the premiums paid. Both the members will have to buy their separate policies.
You will have to look for various policies to select the best for you and your loved ones. You may check joint insurance covers at iSelect and single policies too. Life insurance is a quite complicated topic therefore, make sure to explore very area before buying any policy.
To read more on topics like this, check out the health category.