Joint Life Insurance versus two Single Life Insurance Plans

This article is aimed at couples buying life insurance and the benefits over cost of having or arranging two single life plans rather than just arranging a joint life first death plan for both individuals.

Having made the decision that you have a requirement for life insurance, you would be forgiven for thinking that to just arrange one plan to cover the both of you will do the job and you can move onto the next financial thing you need to do. This is not necessarily the end of it and furthermore may not be the best thing for you.

To make a decision about the life insurance you want to take out you need to be aware of the options that are available to you. For example you could be a couple that are looking for life insurance cover. Most people would choose to take out a joint life first death policy. Joint life first death is an easy plan to understand, the sum assured of the plan will pay out in the event of the first person dying. After this event the plan finishes and there is no remaining life insurance to cover the surviving partner.

The alternative is to arrange life cover on the basis of two single life plans one plan for each person. The result of this is, if one person dies the plan which they own will pay out. The important thing here is the surviving person still has their own life insurance in tact. This is because their plan was not affected by their partner dying.

It is quite common that when couples take out plans to insure themselves that should one of them die the other is in a position of having no life cover at all. This commonly leaves them needing to arrange life insurance as they may still have a need to insure their lives for one reason or another. If this event is sometime after taking out the original plan they will probably find that the cost of cover is considerably higher at this point due to many reason not least the fact that the life assured is that much older and more expensive to insure.

Two single life insurance plans can also be of benefit over a joint life first death in the event that the relationship breaks down. It should be noted on this point that 4 in ten marriages do end in divorce and furthermore a higher figure than that of ordinary relationships do end in permanent separation. You do need to be aware that when this sort of thing happens assets and belongings need to be divided and split equally accordingly. Most if not all life insurance plans do not separate at all and as such need cancelling and rewriting which can be an issue again if you are older and have had health issues. Two single life plans on the other hand do not need separating as they are by definition already two independent plans so can be taken away by their respective owners.

Most people think that taking out two single life plans can be a lot more costly. This however is not the case. Taking out two single life plans for a couple will normally only cost on average an additional 10% more on top of a joint life first death premium. When you compare two single life plans with a joint life first death plan it is easy assess the additional benefits.

Finally one of the best benefits offered by having two plans over the one joint life plan is the benefit of having two payouts over one. If you have a joint life plan, as has been mentioned earlier in this article, there will only ever be one payout as once the first life assured dies the plan ceases to exist. If you have two single life plans both plans are independent of each other and therefore subject to both life assureds dying within the term of the plans there will be two payouts. Couple this with the previously discussed fact of the two plans only costing about 10% more on premiums makes this of great financial benefit.

So to confirm two plans written on single life basis are better than one joint life first death because, they are flexible in the event of separation, they will payout twice the amount on death of both lives assured for normally only about 10% more in premiums. If one person dies the other is not having to sort out life insurance at higher rates due to age or adverse health.