Life Insurance Guide | Insurance Help Product Information | Life assured

The person on whose life the contract depends is called the ‘life assured’. However, although the person who owns the policy and the life assured are frequently the same person, this is not necessarily the case. A policy on the life of one person, but effected and owned by someone else, is called a ‘life of another’ policy. A policy effected by the life assured is called an ‘own life policy’.

Policies can be effected jointly by two persons assured – for example, husband and wife – on their joint lives. Furthermore, although the vast majority of joint life policies have two lives assured, it is theoretically possible to have more if insurable interest exists. Practically any type of life policy can be effected on a joint life basis.

There are two fundamental kinds of joint life policy – first death and second death contracts. A ‘joint life first death’ policy pays out on the death of the first life assured to die. First death term assurance and family income policies are used for family protection purposes. First death endowments are very commonly used in connection with house purchases.

A ‘joint life second death’ policy pays out on the death of the second life assured to die. These are sometimes called joint life last survivor contracts. They are frequently used in inheritance tax planning and sometimes for investment purposes.

A joint life first death policy will always be more expensive than a joint life second death policy because the death claim is payable at an earlier time and therefore the element of premium which pays for the death risk is higher.