In any of the above broad categories, there are also joint and single life policies to choose from, a decision that any couple will need to carefully consider. Single life policies cover one person only, with any payout going to the estate. Joint policies, however, cover both parties, and will either pay out on the death of the first partner (first-death policies, which are typically used to provide a lump sum to cover the mortgage) or the second (second-death policies, which can be used to cover an inheritance tax bill). First-death policies are usually more common, however, and can mean that the surviving partner is left without insurance (unless they take out a new policy, which could be more expensive as they’ll likely be a lot older than when they first arranged cover).
This is just one reason why many people opt for two single-life policies, rather than a joint one, as this can often provide far better value. Not only that, but single life policies offer more flexibility with any payout distributed to the estate under the terms of the will, rather than going directly to the surviving spouse. Then there’s the fact that if both partners die within the policy term, there’ll be two payouts to loved ones. Premiums need not be any more expensive than having a joint-life policy, either, so it could be worth considering.
