Why Buy Joint Life Insurance

UPDATED: Jul 19, 2023Fact Checked

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Jeffrey Johnson

Insurance Lawyer

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Insurance Lawyer

Kalyn Johnson

Insurance Claims Support & Sr. Adjuster

Kalyn grew up in an insurance family with a grandfather, aunt, and uncle leading successful careers as insurance agents. She soon found she has similar interests and followed in their footsteps. After spending about ten years working in the insurance industry as both an appraiser dispatcher and a senior property claims adjuster, she decided to combine her years of insurance experience with another...

Insurance Claims Support & Sr. Adjuster

UPDATED: Jul 19, 2023

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UPDATED: Jul 19, 2023Fact Checked

A joint life insurance policy is an option for couples who would like to provide for each other should one of them pass. Life insurance for couples is an important part of financially supporting your companion, and purchasing a joint life insurance policy can be a simple, affordable, and effective way to meet your needs. Before you purchase, know your options and find the best policy for you and your spouse.

Joint Term Life Insurance

A joint term life insurance policy is a convenient way to cover two people on one policy. It provides a level death benefit for two people for one premium. It allows the owner of the policy to have the ability to name each other as beneficiaries. The policy will operate just like a term life insurance policy in that it will last a certain number of years and the entire premium payment will support the death benefit amount. There are several benefits to term life that make a joint term plan an attractive options for you and your spouse.

Types of Joint Life Insurance

There are two kinds of Joint Life Policies: first to die and second to die.

  • First to die life insurance policies pay the death benefit only on the first insured to die. Therefore if husband and wife were covered under this type of policy, with a death benefit of $250,000 and the husband dies first, the wife would get the death benefit of $250,000. The policy would then be exhausted. This could also be great mortgage life insurance as when the first dies, the death benefit would pay off the mortgage for the remaining insured to live mortgage free.
  • Second to die life insurance policies or survivorship policies pays on the second to die. In the scenario above where the husband has died, the policy would not have paid until the wife died leaving the death benefit to their named beneficiary. Second to die life insurance also insures two or more people for one premium. Since the death benefit is not paid until the last insured dies, the life expectancy for the policy is based on a longer life expectancy which allows for a lower premium. Also called survivorship policies, they are popular for many situations. Often, couples or non married partners who are retired and do not rely on each other for income will buy a survivorship policy to help their children with estate taxes. They are also bought in business partnerships where after the last partner dies, it is used to pay any business expenses.

TIP: Don’t be afraid to ask an experienced agent for advice before you decide what type to purchase.

Is Joint Life Insurance Right for You?

There are some pros and cons to having joint life insurance. Decide if this is right for you and consider the following points:

  • Premiums are usually lower with joint life insurance policies than they would be if you were to buy two separate policies.
  • Not all companies provide joint life insurance. Look for companies that carry this type of policy that have an excellent rating. Check the Free Advice insurance company rating site and stick with companies that have an AA+ to A rating.
  • Additional coverage may be required. If you have first-to-die insurance, the survivor may need to buy an additional policy after the first death to cover expenses. If you feel that will be your situation, ask your agent about a small policy that will cover each individual and purchase that now. It will be only more expenses as you age.
  • Health differences or large gap in age between the insured parties may lead to the younger, healthier insured paying more for coverage than he or she would under an individual policy. Weight out your options. Remember, on the first to die, the younger person would then have to go get insurance at an older age.

Divorce and Joint Life Insurance

Keep in mind, insuring two lives is cheaper than what you would pay to insure both separately. However, it can become a sticky situation if the married couple divorces. Then you have a joint policy on your ex-husband or ex-wife! In the scenario where there are kids, it might be good to discuss setting up a trust where the money can be allocated for the kids in years to come. If the two decide that continuing the joint policy would not be in their best interest, both will now be looking for more insurance at an older age and perhaps not at optimal health, which could increase the premium payments.

Consider all the pros and con before purchasing a joint life insurance policy. Discuss this type of policy with a life insurance agent that can determine if it is right for you. Get an affordable joint life insurance policy quote today! Click here to get started at the Free Advice quote center.

Read more articles to help you find the right life insurance policy for your needs by clicking here.

Case Studies: The Benefits of Joint Life Insurance

Case Study 1: Joint Term Life Insurance

Sarah and John, a married couple in their early 40s, want to ensure financial security for each other in case of a tragic event. They explore joint term life insurance as a cost-effective option to cover both of them on a single policy. This policy provides a level death benefit for both individuals, and they have the flexibility to name each other as beneficiaries. After consulting with an experienced insurance agent, Sarah and John decide that joint term life insurance meets their needs and budget.

Case Study 2: First to Die vs. Second to Die

Michael and Emily, a married couple in their 50s, are considering joint life insurance policies. They seek advice from an insurance agent to understand the differences between first to die and second to die policies. The agent explains that a first to die policy pays out upon the death of the first insured individual, while a second to die policy pays out upon the death of the second insured individual. After careful consideration of their financial goals, Michael and Emily choose a second to die policy to provide for their beneficiaries after both of them pass away.

Case Study 3: Considerations for Divorce

Alex and Mark, a non-married couple, are evaluating joint life insurance as an option to protect each other financially. However, they are concerned about the potential complications in case of a breakup. They seek guidance from their insurance agent, who advises them to discuss setting up a trust to allocate the policy’s benefits for their children, should they have any.

The agent also explains that if they decide to cancel the joint policy after a breakup, they may face higher premium payments when purchasing individual policies at an older age and potentially compromised health.

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Jeffrey Johnson

Insurance Lawyer

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Insurance Lawyer

Kalyn Johnson

Insurance Claims Support & Sr. Adjuster

Kalyn grew up in an insurance family with a grandfather, aunt, and uncle leading successful careers as insurance agents. She soon found she has similar interests and followed in their footsteps. After spending about ten years working in the insurance industry as both an appraiser dispatcher and a senior property claims adjuster, she decided to combine her years of insurance experience with another...

Insurance Claims Support & Sr. Adjuster

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

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