Most People Think That Taking Out Two Single Life Plans Can Be A Lot More Costly

Category: Finance.

If you are a couple and you are looking to arrange life insurance you should read this article before making any decision.

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 do this will help you evaluate the benefits of arranging one plan for the two of you or one plan for each of you. 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. 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. 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. The only other way to arrange cover for a couple and the main basis for this article is to arrange two plans one for each of you on a single life basis. That said the surviving 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.

This then results in, when one person dies the plan which is their pays out the sum assured. When couples take out joint life first death policies you sometimes find that when the plan finishes after a claim the surviving partner is left with no life insurance. When this happens you sometimes find that the cost of life cover has increased for many different reasons, such as your age or even medical circumstances therefore many it more expensive than the original plan. This can leave them needing to arrange more cover to protect their lives. Two single life insurance plans can also be of benefit over a joint life first death in the event that the relationship breaks down. You do need to be aware that when this sort of thing happens assets and belongings need to be divided and split equally accordingly.

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. Most if not all life insurance plans do not separate at all and as such need cancelling and rewriting which can be an issue again if you are older and have had health issues. Most people think that taking out two single life plans can be a lot more costly. 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. This however is not the case. When you compare two single life plans with a joint life first death plan it is easy assess the additional benefits. Taking out two single life plans for a couple will normally only cost on average an additional 10% more on top of a joint life first death premium.

One of the most important benefits still not mentioned is the fact that having two plans could result in double the payout. As two single life plans are written on each individual if both individuals died then both plans would pay out in full. On a joint life first death plan there will only ever be one life insurance payout once the first life assured dies. Again when you factor in this can normally only cost an additional 10% extra in premium payments it makes it very financially beneficial. So in summary having two plans over one means you do not have to reapply for life cover if one of the lives assured dies, you have a far more flexible arrangement should you separate and finally from a cost point of view, being on average only 10% more monthly but with twice the amount of life cover this type of arrangement is far more financially beneficial.

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