Single vs. Joint Life Insurance in Canada: Pros & Cons
What is the difference between 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. It’s either when the first policyholder passes (first-to-die life insurance) or when the second policyholder passes (last-to-die life insurance).
Single life policies are less complex than joint policies while still offering robust protection.
“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 is a popular life insurance option for couples who are planning for their family’s financial future. It covers two people with one policy, usually a married couple or partners in a long-term committed relationship.
A joint life insurance policy can be structured in two different ways, either first-to-die or second-to-die. This choice determines when the payout is made.
Note that you can name any beneficiary you like with joint life insurance. With a first-to-die policy, it is most common to name the surviving partner to provide an immediate financial safety net.
Example: Joint first-to-die. A couple chooses each other as beneficiaries so that, no matter who dies first, the other partner will receive a payout.
Example: Joint second-to-die. A couple cannot choose each other as beneficiaries, so they might name their child or set up a trust as the beneficiary. When the first partner dies, nothing happens. Only when both people pass away is the payout made.
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.
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.
Why do couples choose joint? The simplicity of managing a single policy with one premium and less admin is a major selling point for some couples. This can be a budget-friendly choice for couples who share financial responsibilities.
It’s important to remember that a joint policy pays out only once, typically upon the death of the first insured partner. There are also eligibility requirements for both individuals, so one partner’s health can affect the rate or approval. You do not have to be married! Common-law spouses and partners qualify, too.
Example: A joint life insurance policy for a growing family
Who they are:
- Jess (36) and Raj (32), a married couple
- Their newborn child
Financial snapshot:
- No student debt
- Both earns enough to live comfortably without the other’s income
- No immediate income-replacement risk if one partner dies
Primary goal: Make sure their daughter is financially supported if both parents pass away due to an accident.
Policy choice: Joint last-to-die life insurance, $1.5M in coverage
Why this works for them:
- Payout is triggered only after both parents pass
- Coverage is equal to about 20 years of one partner’s income
- Designed to support the child until she reaches financial independence
- Estate planning, not income replacement
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.
Example: Two term policies for parents with kids
Who they are:
- Mike (43) and Marianne (30), a married couple
- Two children together (12 and 4)
- One child from a previous marriage (17)
Financial snapshot:
- Marianne earns $33,000 per year through her yoga studio
- Mike earns $70,000 per year in construction
- Marianne has $26,000 in student debt
- Shared mortgage of $190,000 outstanding balance
- Ongoing child support obligations
Primary goal: Replace income and cover financial obligations if either parent dies.
Policy choice: Two individual term life insurance policies
- Mike: 10-year term with enough to cover remaining child support and supplement Marianne’s income until the youngest child turns 18
- Marianne: 20-year term with enough to cover student debt and replace her income
Why this works for them:
- Each policy pays out independently
- Coverage matches each person’s debt, income, and obligations
- Better protection for a blended family
- Cost-effective and flexible income replacement
Decision guide: single or joint life insurance?
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 & 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.
Types of joint life policies
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. Both cover two individuals under one plan, typically spouses or partners.
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.
Advantage: When the first partner dies, the other receives the money from the policy, which can help them upkeep their lifestyle or pay off any debts.
Disadvantage: Though it provides immediate financial support to the surviving partner, first-to-die policies leave them without any coverage of their own going forward.
It’s most common to name your partner. Imagine a couple with a mortgage and young children. If one partner were to suddenly pass away, the surviving partner could use the insurance payout 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.
However, there can be tax advantages to choosing a trust as the beneficiary (even if the surviving spouse will have access to that money) or naming a charity to receive the payout from a first-to-die policy.
The bottom line: Immediate payouts can be very helpful for the surviving partner. However, 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.
Advantage: Liquidity can be very helpful when estate taxes roll around after the first spouse’s death, to ensure that heirs receive their full inheritance. With cash value policies, the longer timeline of second-to-die policies can give money more time to grow.
Disadvantage: There is no payout for the living partner after the first partner’s death, which could mean a struggle with loss of income for some families.
Second-to-die policies can be useful for families who have special needs dependents. This structure ensures that the dependent is financially supported after both parents have passed.
The bottom line: Joint last-to-die does not offer immediate financial relief to the surviving partner. However, it’s a good approach for some families who are thinking about wealth planning or dependent care.
Bottom line: best option is usually 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
Bonnie Stinson is an insurance writer and researcher in Toronto with a decade of experience producing helpful, accurate content for Canadians. They have published resources for some of Canada's most innovative and consumer-trusted companies in the health, legal, and fintech sectors.
Bonnie Stinson is an insurance writer and researcher in Toronto with a decade of experience producing helpful, accurate content for Canadians. They have published resources for some of Canada's most innovative and consumer-trusted companies in the health, legal, and fintech sectors.