It depends on the context. Two people do have two lives in English. And two heads are better than one. But sometimes there's some ambiguity.
Imagine three people at the train station.
They waved their handkerchieves
-> probably, each of them waved one handkerchief. But possibly each of them waved multiple handkerchieves.
They waved their handkerchief
-> probably, each of them waved one handkerchief. But it sounds a lot like they all waved one big handkerchief.
Each of them waved a handkerchief
-> 3 people, 3 handkerchieves
Each of them waved handkerchieves
-> 3 people, at least 6 handkerchieves
They all wore their hats on their heads.
-> If they are aliens, they may have multiple heads
-> If they are humans, it was one hat per head and person
-> If the context is a radiation leak at a nuclear plant, it's probably best to just say "They all wore their hats" to avoid unintentional humour.
They had never been there in their lives.
They had never been there in their life.
-> The latter makes it sound as if they have been together all their lives - maybe twins?