Single vs. Joint Life Insurance in Canada: Pros & Cons

Single vs. joint life insurance

When choosing a type of life insurance, one key decision for many Canadian families is whether to pick a single or joint policy. This is a common question for couples seeking coverage.

Here are the main differences between these two types of policies: 

• Single: Single life insurance policies cover each individual separately, meaning it offers two separate payouts, and coverage can be customized to each person’s needs. 
• Joint: Joint life insurance covers two or more people under one policy, which means there’s only one payout—either when the first policyholder passes (first-to-die life insurance) or when the second policyholder passes (last-to-die life insurance).

“Combined life insurance is individual coverage, but the plan is combined, saving the couple some money on admin fees, discounts, etc.” —Ivana Govedarica, Licensed Insurance Advisor

Single life insurance for couples is typically the best choice. It protects each partner with separate payouts and gives both policyholders more coverage flexibility based on their individual financial obligations. 

What is joint life insurance?

A joint life insurance policy covers two people under one policy, typically a married couple or partners in a long-term committed relationship. This policy structure offers a single coverage amount for two people regardless of any differences in their financial needs, but it’s more affordable than holding two individual policies.

Joint policies often come in two forms:

• First-to-die: Pays out upon the death of the first insured person
• Second-to-die: Pays out after both insured individuals have passed away

Joint life insurance = One policy, one payout

A joint policy may be cheaper than two single policies, but the lower premiums come at a price: lower value. Joint policies only pay out once, which can be problematic for many families. With a first-to-die policy, the living partner will be left without coverage. And second-to-die policies leave the surviving partner with no payout to replace lost income or cover other expenses.

What is single life insurance?

A single life insurance policy covers one person. This type of policy is straightforward and provides a payout to your beneficiary if you pass away.

Single policies are typically ideal for couples:
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Fact: Combined term life is a top pick for couples

Combined term life insurance policies are typically the smartest choice for couples. Each partner can select a term that best suits their financial obligations. Some insurance providers even offer discounts for couples who buy separate life insurance policies, like PolicyMe’s 10% term policy discount for couples.

Is it better to get single or joint life insurance?

Single policies offer more flexibility for coverage, policy lengths, and beneficiaries, but joint life insurance is often considered a budget-friendly option for those who don’t mind receiving less coverage.

Here’s a detailed look to help you make the best decision for your unique situation.

Who should pick a joint life insurance policy?

Joint life insurance might be the better option for you and your partner if:

• You need affordable coverage: You want low premiums and one payout shared between the two of you.
• You’re of a similar age and health: Both of you are close in age and in good health, so a joint policy could potentially be more cost-effective. 
• Your finances are shared and balanced: You make a similar amount, don’t have major individual debts, and aren’t reliant on each other’s income for living expenses.

Joint policies usually come with a single premium compared to two separate policies, so they can be a budget-friendly choice for couples who share financial responsibilities. However, it’s important to remember that a joint policy pays out only once, typically upon the death of the first insured partner.

Here’s an example:

Jess (36) and Raj (32) are shopping for life insurance following the birth of their first child, Natalie. Jess is a software designer for a small company in Toronto, while Raj works remotely as a consultant. Neither of them has student debt, and they both make enough to live on comfortably without the other person’s income, but they want to make sure their daughter is provided for if they both pass away in an accident or other catastrophe. 

Jess and Raj select a joint last-to-die life insurance policy with $1.5M in coverage—roughly 20 years’ worth of one partner’s income and enough to support Natalie until she’s financially independent. 

Nothing lasts forever… but your joint policy might

Unfortunately, not every couple stays married, which may cause issues if a joint policy is in the mix. Splitting a joint policy can be tricky, and many insurance providers don’t offer this option. In many cases, policyholders need to apply for new life insurance coverage, which may come at a higher rate.

Who should pick a single life insurance policy?

Single life insurance could be the better choice if:

• You want flexibility: Policyholders have more control over coverage, term lengths, beneficiaries, and policy cancellations. 
• You have larger financial responsibilities: Single policies can provide each policyholder with more assurance that their death benefit can be used to provide for young children, replace income, and cover large expenses.
• You have potential health concerns: One or both of you have health issues that could affect your eligibility or premiums.
• You’re a blended family: Either partner has children from a previous relationship, necessitating more tailored coverage.

Single-term policies offer much greater flexibility than joint life policies. Each life insurance plan can be customized to fit the specific needs and circumstances of the individual, ensuring that both partners get the coverage that suits them best.

In short: Joint life insurance policies tend to be more affordable but have half the coverage. Separate policies are more accommodating if you and your partner have different life insurance needs or want robust coverage for your situation.

Here’s an example:

Mike (43) and Marianne (30) are looking for life insurance to protect their children, Gigi (12) and Andrew (4). Mike also has a son, Caleb (17), from a previous marriage. Marianne has $26,000 in student debt and owns an at-home yoga studio that brings in about $33,000 per year. Mike makes double that amount as a construction worker and has no debts besides their shared mortgage, which has an outstanding balance of $190,000. 

Mike and Marianne purchase individual term life insurance policies. Mike buys a 10-year policy with enough coverage to pay for his remaining child support obligations and supplement Marianne’s yoga studio income until Andrew is 18. Because Marianne is younger and in excellent health, she undergoes a medical exam for a fully underwritten 20-year policy to cover her student debt as well as her annual income. 

Is single or joint life insurance better for you?

1. Are you able to afford two life insurance premiums?

2. Are you and your partner dependent on each other’s income?

3. Does either partner have individual debt that’s not shared with the other partner? 

4. Do either of you have health concerns? 

5. Are you in a committed long-term relationship? 

“A lot of people come into the conversation with misconceptions about life insurance. Some expect a one-size-fits-all family policy, but in Canada, coverage can be built through a mix of individual and joint policies depending on your needs.” —Christelle Arouko, Licensed Insurance Advisor

Pros and cons: Joint life insurance

Joint life insurance is a policy that covers two people and pays out upon the death of one person—either after the first policyholder passes, or after both pass. Here’s a detailed look at the pros and cons to help you decide if it’s right for you.

Pros of joint life insurance

Cons of joint life insurance
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Pros and cons: Single life insurance

Individual life insurance is a policy that covers one person. As the policyholder and insured individual, you're the only one who can choose your beneficiaries and cancel your policy.

Individual coverage is different from joint life insurance, which covers two people under one policy, and group life insurance, which is tied to your job or group membership and ends if you leave.

Pros of single life insurance

Cons of single life insurance
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Types of joint life policies

Joint policies are a popular consideration for couples who are planning for their family’s financial future. These policies cover two individuals under one plan, typically spouses or partners. There are two main types of joint life policies to consider—joint first-to-die and joint second-to-die, also known as joint last-to-die.

Joint first-to-die policy

A joint first-to-die policy pays out the death benefit when the first person covered by the policy passes away.

When one partner dies, the other receives the money from the policy, which can help them upkeep their lifestyle or pay off any debts. It provides immediate financial support to the surviving partner, but it also leaves them without any coverage going forward.

For example, imagine a couple with a mortgage and young children. If one partner were to suddenly pass away, the surviving partner would receive the insurance payout. This money can be used to continue paying the mortgage, cover childcare costs, or manage other living expenses. It can also help settle any outstanding debts, giving the surviving partner financial stability during a difficult time.

The catch? The surviving partner will no longer have coverage under the joint policy. They will need to purchase a new single policy if they want life insurance coverage to potentially support their young children in the future.

Joint second-to-die policy (survivorship life insurance)

The second-to-die policy, also known as survivorship life insurance or joint last-to-die, pays out only after both insured individuals have passed away. This policy is often used for estate planning purposes, as it provides a lump sum that can help cover estate taxes, ensuring that heirs receive the full value of their inheritance.

It may also be useful for families with special needs dependents, ensuring they are financially supported after both parents have passed.

The main caveat: Joint last-to-die does not offer immediate financial relief to the surviving partner. If the first partner on the policy passes away, the living partner will not receive any payout and may struggle financially—especially if there is a loss of income. 

The bottom line: The best option is combined individual coverage with a couple's discount

A joint policy may seem like a good idea because it's marketed as easier to manage and offers lower premiums, but the trade-off is limited flexibility and lower protection value. Most Canadian couples and families benefit more from single policies, which provide more room for adaptability to individual needs and include one payout per policy.

Here are two key points to keep in mind:

• Flexibility: Single life insurance policies provide more flexibility, allowing each person to choose their own coverage amount and term length. This customization is ideal for couples with different insurance needs, ensuring that each person gets the coverage they require.
• Payout structure: Joint first-to-die policies leave the surviving partner without coverage, and joint second-to-die policies leave the surviving partner without a payout. Single life insurance ensures both partners have coverage and provides a payout regardless of who passes away first.

For those who want to protect their budget and secure broad, flexible coverage through single life insurance policies, it’s best to opt for a provider who offers couple discounts. For example, couples who apply for life insurance with PolicyMe can earn 10% off on the first year premiums when they apply together. The online application process is designed to get you coverage as soon as possible, without paperwork or wait times.

“When two people commit to building a life together—whether that means marriage, buying a home, or starting a family—the focus is rightly on hopes and dreams. But true commitment also includes planning for the unexpected. Life insurance is not about being pessimistic; it’s about being responsible, loving, and forward-thinking. You're not planning for death; you're planning for life to keep going for the one you love.” —Ivana Govedarica, Licensed Insurance Advisor

FAQs: Single vs joint life insurance