LYNDHURST FINANCIAL MANAGEMENT BLOG

If you are buying a house with your partner you will more often than not be recommended a joint life insurance policy as a minimum level of protection for the purchase. This will be the cheapest way to protect your investment for the remaining life, should one of you die. The policy is usually described as “Joint Life First Death”. This means it will pay out on the first claim and then cease. This leaves no life cover remaining for the second life.

You can look at policy’s that have a buy back option so that in the event of a claim life 2 can buy back life cover and continue to be insured for their death. These policies tend to attract extra premiums for the option.

Another way is to consider separate cover for each person and placing the poliy in trust to the remaining life using a flexible trust form. The premiums for single cover will be slightly more, usually within 10% but the benefits are, you get twice the level of cover with the potential payout being double that of a joint life first death policy should the worst happen. Another benefit often overlooked is if you and your partner were to split up you may not wish to keep your joint life insurance policy. Therefore you would require a new life insurance policy later in life when premiums are more expensive. If you had single policies you could maintain them and change the beneficiaries on the trust which in normal circumstances would be cheaper and easier.

Of course we never imagine when entering into a joint house purchase with a partner that we will be splitting up but this way you benefit from double the cover and greater flexibility for little extra cost.

http://www.lyndhurstfm.co.uk/Life_Insurance_Quotes/

Adam Cook
Head of Operations

Life Insurance, Term Assurance, Mortgage Protection, Critical Illness Cover