It can work out cheaper than two standalone policies.
It can be less hassle to manage one direct debit payment and one policy.
Joint life insurance vs individual life insurance
Joint life insurance
Couples of a joint life insurance policy are covered under a single policy and usually share the same level of cover.
Most operate on a first-death basis which means the life insurance benefit is paid out just once – when the first person on the policy passes away.
It's often an affordable and convenient solution for couples looking to take out life insurance – you can often get joint policy discount.
Individual life insurance
A single life insurance policy covers one person only.
If you both have individual life insurance policies and you or your partner dies, one policy will still be active.
Individuals can take out life insurance through their superannuation fund.
So should you apply for a joint life insurance policy as a couple? Or does it make sense to take out two single policies? See the differences below:
Single life insurance
Joint life insurance
Who is covered?
Single life insurance or individual life insurance is a policy that only covers one life.
People who usually consider getting joint life insurance benefits are often married or co-inhabiting.
These couples are often with dependants they want to protect if or when they die, or suffer a critical illness.
In what events will it payout?
If the policyholder of the single life insurance policy passes away there will be a payout.
If either partner passes away there is a payout.
When should a couple consider this type of cover?
Ideal if one partner is either much older than the other (which can drive up costs of a joint policy) or where one partner simply doesn't qualify for life insurance.
If you each have different life insurance needs or one spouse doesn't need life insurance.
Ideal for any kind or form of interdependent relationship, where if the partner passes away, the other would face financial pressure immediately.
Looking for 'first to die' life insurance? First to die policies are not offered in Australia. If you want to read more about first to die cover you can do so here.
Pros and cons of a joint life insurance policy
Pros
Affordability. The cost of insuring two people instead of one is cheaper, which in turn affects the price of the policy itself.
Peace of mind for both of you. If only one of you has life insurance cover, only one of you is protected – unlike with joint life insurance.
Convenience. It's one less policy to look after and one less monthly premium payment to keep up with.
Cons
Potentially complicated if your relationship breaks down. You'll need to cancel, split or agree to keep your policy in place.
You might not receive a discount. It might not be worth it if you can't receive a discount.
Direct life insurance policies that offer joint cover
Life Insurance is a little complicated and a lot overwhelming. That's why we made the Finder Score, to make it easier to compare Life Insurance products against each other. Our experts analysed over 20 products and gave each one a score between 1 and 10.
But a higher score doesn't always mean a product is better for you. Your situation is unique, so your policy choice will be too. Don't think of Finder Score as the final word, but as a good place to start your life insurance comparison.
Joint life insurance is a life insurance policy that looks after two people – usually a spouse or de facto partner. However, it generally only pays out when the first person on the policy dies.
The main reason for getting a joint life insurance policy is this: it pays out regardless of which partner dies, and it's often cheaper than taking out two standalone policies, especially if you can get a discount.
If you split up, it's worth speaking to the life insurer to see how you can work out a way to keep cover in place. If you cancel your policy, you'll lose out on any benefits.
Yes, term life insurance is often available as a joint policy. You can ask your chosen insurer at the time of application to be sure.
One of the main advantages of getting a joint life insurance policy is it pays out regardless of which partner dies. Plus, it's often cheaper than taking out two standalone policies, especially if you can get a discount.
Gary Ross Hunter was an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146). See full bio
Gary Ross's expertise
Gary Ross has written 648 Finder guides across topics including:
Find out what determines the price of life insurance and what you can expect to pay each week to be covered.
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