Why Two Life Insurance Policies Might Be Better Than Just One
Chris Clare
The standard type of insurance for couples in need of it is a joint life first death policy. This is the way it's been in the insurance industry for years. However, this doesn't have to be the only type of policy available for couples. There are benefits to having one plan for each person.
Having come to the conclusion that you need life insurance for one reason or another, most people do not think that in some cases it could far more beneficial to take out two single life plans rather than a joint life first death.
Whenever you buy insurance, it's important to understand your options. Couples using a traditional plan can run into some obstacles. While the way these plans pay out is pretty simple - whomever dies first is the one the benefits are paid for - they have a big drawback. Once benefits are paid for one partner, the policy stops existing. For people who still need life insurance after the death of their partner, this can create big problems.
The alternative is to arrange life cover on the basis of two single life plans one plan for each person. The result of this is, if one person dies the plan which they own will pay out. The important thing here is the surviving person still has their own life insurance in tact. This is because their plan was not affected by their partner dying.
It is quite common that when couples take out plans to insure themselves that should 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 sometime after taking out the original plan they will probably find that the cost of cover is considerably 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.
One other reason why two single life plans can be far more beneficial to the one joint life first death plan is down to how relationships and marriages work, or not, as the case may be. It is said that 40% of marriages will end in divorce and a significantly higher percentage of relationships will end in separation. In these situations assets have to be split in order to pass equal benefit to each partner. Life insurance plans are in most cases, if not all, impossible to separate. So if you have to single life plans this problem does not present itself as each life assured walks away with their own plan in tact.
One common belief is that it costs too much to have your own life insurance plan. In fact, setting up two single plans for a couple costs around ten percent more than setting up a joint plan. Since you'll essentially be receiving twice the benefit, this extra cost is well worth it. Having your own plan, separate from your partner's is clearly the better choice.
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 therefore 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 of great financial benefit.
In summary, having one plan per person, even if you're a couple, means never having to reapply for insurance at a higher rate. If your partner dies, you'll still be covered. In the event that a relationship fails, the arrangement is more flexible than joint plans, and the cost over financial benefit is excellent if you compare them. When you go shopping for life insurance for you and your partner, look into alternative plans, instead of just going for joint life insurance. In this case, two life insurance plans is probably better than just one.
Planning out your http://www.life-ins.co.uk) life cover can be a minefield of information. So for sound quality information and online quotations for http://www.life-ins.co.uk) low cost life insurance visit Life-ins.co.uk
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