Life Insurance That's Twice As Nice
This simple tip makes it easy for couples to avoid hassle and enjoy better protection when buying life cover.
If you're single, then look away, because my guidance today applies only to couples, that is, people who live under the same roof and are married, living together or in a same-sex relationship.We Brits aren't much cop when it comes to buying life insurance. Indeed, there's a huge gap between the level of protection which we need and the cover that we actually possess. In 2006, Swiss Re, the world's leading life & health reinsurer, estimated that this 'protection gap' for life insurance had widened to £2½ trillion, up £500 billion from the 2002 figure of £2 trillion.To me, it's odd that while our craving for credit has been rising, our appetite for life insurance has been falling. Even though premiums have tumbled thanks to increased longevity and cut-throat competition among insurers, we still don't have enough protection to fall back on when disaster strikes. Perhaps our household budgets have become too strained, thanks to soaring household bills and rising interest rates?Anyway, if you're a couple looking for a new life insurance policy, or would like to prune the premiums charged by your existing policies, then here's a tip from me: avoid 'joint life, first death' plans.These policies are usually taken out by couples to cover mortgages and other loans, or to provide for their children. However, although these policies cover two people, they only pay out once, on the first death. Thus, after receiving the payout, the survivor may be uninsured and left exposed to fate. My advice is to buy two individual 'his and hers' plans with two separate payouts -- one for each person.Although this approach may cost a few pounds more each month, you get two potential payouts instead of one, which amounts to twice as much cover for a few extra quid. Not only does this avoid the problem of leaving an uninsured survivor, but it makes it easier to divide up your protection if you were to separate or divorce. It's easy for two individual plans to go their separate ways, but almost impossible to split a joint policy down the middle. Furthermore, the his-and-hers route makes life easier when it comes to planning for inheritance tax, too.In some circumstances, I have heard that two separate policies can cost less than a joint policy, usually when one partner is in much better health (or much younger) than the other. Thus, it makes sense to shop around for two separate Best Buy life insurance plans, rather than 'conveniently' buying a bog-standard joint policy. At best, those few extra pounds each month could double your payout.Finally, for more tips on how to protect yourself, your partner and your family, read Oops, You Bought The Wrong Protection and More Buying Blunders To Beware Of.Be lucky!More: Get quality quotes for life insurance via The Fool!The comments above are the opinions of the author only and do not represent advice specific to your circumstances.