4 min read
According to industry experts, the protection sector has largely under-represented dual-life insurance policies, which remain widely underused by both insurers and consumers. Many people are reported to be unfamiliar with its benefits, often defaulting to traditional joint-life options.
What is dual-life cover?
When couples take out life insurance, a common choice is a joint life policy – one plan that pays out when the first partner passes away. But there’s another option that doesn’t always get the attention it deserves: dual-life cover. With this type of policy, each partner has their own individual cover within one plan, meaning two potential payouts instead of just one.
Crucially, the second payout could make a real difference for children or other beneficiaries left behind, as the money can be used to help with their future care and financial security. On a death claim, the other policy remains in force, providing that extra layer of reassurance.
It’s a set-up that can offer extra peace of mind, especially for households where both incomes are important. Yet despite its advantages, brokers say dual-life insurance is still widely overlooked.
Dual-life cover gets short shrift
Rowley Turton director, Scott Gallacher, says that because insurance is often both needs-based and cost-driven, it’s “not surprising” that dual-life cover has remained underused due to its relatively expensive price. “While dual life offers superior protection, many clients are naturally drawn to the lower premiums of joint life cover, especially when budgets are tight,” he added.
Yet for many brokers it's for this superior protection that they are suggesting it is time for the insurance industry to give dual-life cover closer attention.
Fairer terms and payments
Joe Farmer, writing in the FT, clarifies the point, emphasising that when both insured individuals are financially significant to a household – such as dual-income parents – dual-life cover can offer fairer terms and payout structures. “From my research, it’s clear dual life cover is often overlooked,” he stated. “For example, Guardian provides a joint life policy priced at £30.66 per month, while a dual life policy is £35.66.”
But Farmer pointed out that in this example, “For just £5 more, you get the added benefit of covering both lives individually, offering excellent value for money and added peace of mind.”
Could dual-life cover be a better idea for couples?
Another reason brokers often highlight dual-life cover is that it can adapt better to life’s twists and turns. With a joint life policy, once a claim is made, the cover ends – leaving the surviving partner without any protection. If they wanted to take out a new policy at that stage, it could be much more expensive because premiums rise with age. Health issues can make it harder to get cover, too.
There’s also the practical side to consider. If a relationship breaks down, it may not be possible to split a joint life policy into two single policies. With dual-life cover, each partner has their own individual protection built in, which makes it more flexible in the long run.
Despite the major selling points, brokers note that insurers rarely promote dual-life policies directly to consumers, meaning awareness is low. Clarifying the product features could help clients make more informed choices.
A superior set-up?
Respect Capital Managing Director, Sean Horton, agreed that Dual-Life cover is “a far superior set-up” compared to standard joint life (first death) policies.
“It’s simple for the customer, as they only have one policy to worry about and there’s the potential for two death claims as the survivor remains covered.” Horton also adds that each dual-life policy can be set up with different amounts of cover, which is helpful for family protection. On a death claim, the other policy remains in force.
Tailored benefits
While still overshadowed by more traditional options, dual-life cover offers tailored benefits for households where both members play significant financial roles. Brokers say it deserves more attention from insurers aiming to broaden product transparency and reach.