Joint Term Life Insurance

Life insurance is an essential and low-risk consideration when it comes to financial planning and investment. There are many different types of life insurance policies and it seems that for any goal or contingency, there is a type of life insurance that can offer a solution to your financial needs. One of the variations in the term life insurance category is joint term life insurance. Term life insurance, already promoted as being “pure insurance”, comes with cheaper rates as joint term life insurance, allowing you to insure two individuals or policyholders with one term life policy.

What Is Joint Term Life Insurance?

With joint term life insurance, or as it may be known, first to die term, the policy will pay a single death benefit to the survivor of a couple should one of the insured parties die. The payout, like conventional insurance proceeds, will provide the financial means and resources for the survivor to replace the income of the deceased, resolve final expenses, make mortgage or debt payments, or maintain child care obligations, including tuition. Depending on the policy, a second death benefit may be paid if both insured die at the same time, usually within 15 to 30 days of each other.

Because the benefit is typically only paid once, premiums are lower when compared to the purchase of a separate term life insurance policy for each person. Joint term life insurance offers protection to two individuals for one cheaper life insurance rate. Even if one of the persons insured is older, meaning that the premium will be slightly higher as it is based on the age and health of the older partner, it still works out as a two for one proposition. The policy may also offer the option for renewal or conversion to a whole life insurance or universal life insurance policy.

What Are The Advantages?

Term life has always been recognized as an excellent option for providing affordable life insurance coverage at a fraction of the cost of having two policies. Since more of the premium actually goes to the insurance and is not used for investment goals, the policyholder gets more coverage for less money. With joint term or “first to die” term life insurance policies, a young couple beginning their life together can obtain a life insurance quote that is lower than the combined cost of two individual policies.

Older couples may have an incentive as well for taking advantage of joint term life insurance; the provision for final expenses or educational needs for grown children in families may make additional coverage desirable to supplement other life insurance, like whole or universal life. Typical terms are 10 or 20 years, where the premiums and benefits remain level while the policy is in force, providing flexibility for the policyholder’s needs and goals.

Are There Alternatives?

In addition to buying two individual term life policies, there is always the possibility of purchasing a permanent, term or whole life policy. With whole life, the insurance coverage is combined with an investment vehicle that builds cash value in addition to the death benefit. Because of this, whole life insurance quotes generally run higher than term life quotes; especially for older policyholders. With joint term, even with the premium calculated on the age and health of the older applicant or spouse, the rates are usually cheaper and provide greater benefit.