Joint vs Separate: Quick Comparison
| Feature | Joint Policy | Two Separate Policies |
|---|---|---|
| Cost | 10–20% cheaper | Slightly more |
| Number of payouts | One (first death only) | Both partners covered independently |
| After first death | Policy ends – survivor has no cover | Surviving partner keeps their cover |
| Divorce / separation | Complicated to split | No impact |
| Flexibility | Tied together | Fully independent |
Why Separate Policies Are Usually Better
The savings from a joint policy (10–20%) seem attractive, but the trade-off is significant. With a joint policy, if one partner dies:
- The policy pays out once and ends
- The surviving partner is left with no life insurance
- They will now be older, potentially with health issues, making a new policy much more expensive or even impossible to obtain
Two separate policies mean both partners can claim independently. If one dies, the other retains their full cover. This is significantly more valuable than a 10–20% discount.
When Joint Might Make Sense
- Your budget is very tight and joint cover is all you can afford
- You only need cover for one specific shared debt (like a mortgage)
- One partner has health conditions making individual cover difficult
What About Unmarried Couples?
Unmarried partners can take out joint life insurance or separate policies just like married couples. However, there is one important difference: if you are not married or in a civil partnership, life insurance payouts may be subject to inheritance tax. Placing the policy in trust avoids this issue.
Frequently Asked Questions
Separate is almost always better. Joint pays once then ends. Extra cost: ~10–20%.
Yes. Place the policy in trust to avoid potential inheritance tax for unmarried partners.