Many insurers favour the benefits of choosing two single life policies as opposed to a joint life scheme, but some recognise that this might not be such a simple move.
Roger Edwards, marketing consultant and marketing director at Protection Review, explains: “When we were setting up Bright Grey back in 2002, we did consider launching without joint life policies. But as we would have been the only provider doing this and there was still demand for these policies, we felt we would have been shooting ourselves in the foot.”
Special circumstances
While opting for two single life policies can deliver more value for money, joint life policies can still be favourable in some cases. Joint life cover for a business loan works perfectly well, as there is only one debt to clear and, once paid off, there is no requirement to take out further cover.
Additionally, Rob Harvey, independent protection expert at Drewberry, says a joint life policy may still be the most appropriate choice for some couples. “Even where there are children and daily living expenses to consider on top of a mortgage, it may make more sense to have a joint life policy that will both pay off the mortgage and leave a lump sum for the family,” he explains.
“Whether the additional expense of taking out two separate policies is required or not will depend entirely on the clients in question.”
However, the arguments for joint life policies are increasingly limited – two single life policies offer greater flexibility, certainty and cover.
In the situation where advisers recommend a joint life policy, they must ensure that consumers fully understand the ramifications of sharing their life insurance with another person.
BIG NUMBERS
1.3m
Number of life insurance policies sold in 2016 (Swiss Re, Term & Health Watch 2017)
£144,132
Average sum assured for life policies sold in 2016 (Swiss Re)
£394
Average annual premium for life policies sold in 2016 (Swiss Re)
12 years
Average length of a marriage in the UK (Office for National Statistics)
£1.3trn
Total mortgage debt in the UK in 2016(UK Finance)
