Is a joint life insurance policy right for you?
If you are in a long-term relationship, then you want to do everything in your power to protect your partner. Because your significant other will likely suffer financially in the event of your unexpected death, you may be looking into life insurance so you can continue to support them. One great life insurance option for couples is joint life insurance policies. Here’s is what you should know about this life insurance coverage option.
- Joint Life Insurance Options
A joint term life insurance policy is a way to insure two people on a single life insurance policy. Joint life insurance comes in two main types: first to die policies and second to die policies. First to die life insurance policies will pay out death benefits on the first-named insured that dies. So, if a husband and wife had this type of policy with a death benefit of $500,000 and the husband died first, their wife would receive the full $500,000. At this point, the life insurance policy would be exhausted.
Second to die life insurance policies, also known as survivorship policies, will pay death benefits on the second named insured that dies. Using the same example of the husband and wife, when the husband dies, the wife would not receive benefits. However, upon her death, the listed beneficiaries would receive the payout. Second to die policies are popular with couples who do not rely on each other financially, but who want to assist their children with estate tax liability.
- Joint Life Insurance Cost
Because joint life insurance policies cover two policyholders for a single premium, this option is more affordable than each partner having their own insurance policy. If you and your partner have a large age gap or different health outlooks, then securing a joint policy will mean that the younger or healthier partner will end up paying more for life insurance than they would if they had their own policy. So, this is important to consider when deciding if joint life insurance is right for you and your significant other.
- Joint Life Insurance and Separation
Many couples are concerned about what happens if they have a joint life insurance policy but end up separating. Sometimes, separated couples decide to keep their coverage, especially if they have a second to die policy that is designed to support their children. Couples who have first to die policies may decide to set up a trust where their insurance benefit can be designated for their children once they reach a certain age. Finally, some couples simply decide to cancel their joint life insurance. Please keep in mind that this option will mean that each partner will have to go and secure their own policy. If you are looking for life insurance at an older age or with existing health problems, then this will likely mean an increase in premium payments.
This is what couples should know about joint life insurance. Do you have additional questions about your life insurance coverage? If so, then contact the experts at Steve Wilk Insurance. Check out our new office today at 310 S Main Street, Suite C, Lombard, IL 60148.