Mortgage protection for couples

What a joint first-to-die policy does

It pays once, on the first death, and then ends. The survivor has no coverage from that policy at all.

They then need new coverage — older, and in whatever health they're in, possibly affected by the circumstances that caused the claim. If their health has changed, it may be expensive or unavailable.

Two individual policies instead

• Each person keeps coverage after the other dies
• Amounts can differ, matching what each person's loss would actually cost the household
• They separate cleanly if the relationship does
• Each can be converted, cancelled or adjusted independently
• Both pay if both die, which a joint first-to-die policy does not

Size each person separately

The instinct is to split the mortgage in half. That's rarely right, because losing either person doesn't cost the household half.

Consider the loss of each person's income, the childcare or care work each provides, and what the survivor would actually need. A higher earner and a full-time carer both represent real, and different, losses.

Co-borrowers who aren't a couple

Where a parent co-signs, or friends or siblings buy together, the same logic applies with an added wrinkle: a co-signer remains liable for the whole debt regardless of who dies.

Whoever carries that exposure should be covered for it, and the arrangement is worth agreeing explicitly rather than assumed.

Name each other properly

Check the beneficiary designations on both policies, and review them after any change in the relationship. And name a contingent beneficiary — if both die together, a policy with no surviving beneficiary generally pays into the estate.

Neither of those takes long and both are routinely skipped.