Are joint life policies still viable for married couples in 2024?

Life insurance is a crucial component of financial planning for married couples. File photo

Life insurance is a crucial component of financial planning for married couples. File photo

Published Mar 5, 2024


By: Schalk Malan

Life insurance is a crucial component of financial planning for married couples, providing peace of mind and protection for the future. While joint life policies offer convenience by covering both spouses under a single plan, navigating this territory requires careful consideration.

In South Africa, joint life policies used to be common practice; however, this has gradually changed over the years. Thanks to the omission of a tax benefit attached to it, fewer couples are opting for joint life insurance.

Although having one policy can mean less initial paperwork and administration, and potentially help with a small saving on the policy administration fee, there are no real advantages to it. When thinking about any kind of insurance coverage, the most important factor should be the needs and circumstances of each individual. Because everyone’s needs are different, having a joint life policy simply cannot give the best cover to both spouses. Here are five factors to consider:

Assess your individual needs

Before committing to a joint life policy, couples must assess their individual financial needs and circumstances. While bundled coverage may seem convenient, it may not adequately address the specific requirements of each spouse. Consider factors such as income levels, debt obligations, future financial goals, and dependants when determining the appropriate amount and type of coverage needed for each person.

Evaluate the dynamics of your relationship

Understanding the dynamics of your relationship is essential when considering joint life insurance. While marriage signifies a commitment to shared responsibilities, it’s crucial to acknowledge the potential impact of divorce or separation on insurance coverage. Discuss contingency plans and ensure clarity regarding ownership rights, premium responsibilities, and beneficiary designations in the event of a relationship breakdown. These considerations also apply in the event of one of the parties passing away and making provision for the other to potentially become the owner, change bank details, and nominate new beneficiaries.

Compare different options

Don’t settle for the first policy you come across. Take the time to research and compare multiple insurance providers to find the best coverage options available. Consider factors such as premium rates, coverage limits, policy features, and customer service reputation. Additionally, explore whether separate individual policies may offer more flexibility or better-tailored coverage for your specific needs.

Seek professional advice

When it comes to life insurance decisions, seeking advice from a qualified financial adviser is invaluable. An experienced adviser can provide personalised guidance based on your unique financial situation, helping you navigate the complexities of your policies. They can offer insights into the long-term implications of your insurance choices, ensuring that your coverage aligns with your overall financial goals and objectives.

Review and update your policy regularly

Life insurance needs to evolve, so it’s essential to review your policy regularly and make changes as needed. Changes in marital status, family dynamics, income levels, and financial goals may warrant updates to your cover. Schedule annual policy reviews with your financial adviser to ensure that your policy continues to meet your evolving needs and provides adequate protection for you and your loved ones.

* Malan is the chief executive officer at BrightRock.