This information has been written for the benefit of couples who are looking to purchase life insurance. It shows you the benefits of taking out two single life plans instead of a joint life first death policy.
Once you have decided that you need life insurance, the majority of people are not aware that in some cases it can be more beneficial for you to take out two single life plans rather than the joint life first death plan.
To get to grips with why one solution is better than the other you first have to understand what these solutions are and what they actually mean to you in your financial situation. It has to be said that when a lot of couples are faced with the need for life insurance the instinct is do arrange the cover on a joint life first death basis. This type of plan is simple it insures you for the sum assured and when the first of you dies it will pay out and then cease to exist.
The only other way to arrange cover for a couple and the main basis for this article is to arrange two plans for each of you on a single life basis. This then results in, when one person dies the plan which is their pays out the sum assured. That said the continuing person still has their own life insurance running, because their plan is completely unaffected by the passing of their partner and their respective plan paying out.
It is quite common that when couples take out plans to insure themselves that 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 sometimes after taking out the original plan they will probably find that the cost of cover is significantly 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 debts need to be divided and split equally accordingly. Most if not all life insurance plans do not separate at all and as such need canceling 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.
A lot of people assume that taking out two plans rather one joint is a lot more expensive and therefore unaffordable. This is far from the truth arranging two separate plans over one joint one can invariably only cost about 10% more on the overall premium. When you factor in the increase benefits already stated above an extra 10% is a small price to pay.
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 there is 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 great financial benefit.
In conclusion couples that take out two single life plans instead of the joint life first death plan do not have to apply again for life insurance in the event of a claim for the death of the first life, they also have the added benefit of the plans paying out twice in the event of both lives guaranteed diving and both plans are easy to carry on if you divorce or separate.