When to buy joint life term insurance

Some term life insurance policies provide you an option of getting either a single life cover or a joint life first death policy. Getting the latter can be a cheaper option if you want coverage that can protect surviving family members in case you or your spouse dies.

How does Joint Life Term Insurance work?

This kind of policy insures two people (spouses, business partners or any allowable relationship for a joint life policy) and provides a certain lump sum amount in the event that one of the insured persons dies.

Joint Life First Death. This covers both lives (i.e. spouses) and pays the sum insured for the life of whoever dies first.  Once the death benefit has been paid, the coverage of the policy will no longer be in force and no other payments will be made.

Joint Life Second Death. This covers both lives but pays upon the death of the surviving person insured. For example, if a couple is covered by a joint life second death policy, the policy pays out and terminates when both spouses die.

Why Joint Life Coverage?

It is good to prepare for life’s unexpected twists and turns by getting insurance. You don’t really know which spouse or partner will pass away first. You can opt to get separate coverage for both spouses – but this will be a more expensive option.

A joint life term insurance policy is a cheaper option because it ensures that you will receive a lump sum benefit in the event that either you or your spouse passes away.

Here are some instances where a joint life term insurance should be considered:

• Couples buying a home for the first time. A joint policy will help save money at this time when the budget may be limited.  The surviving spouse can use the proceeds of the insurance to manage the mortgage (or pay it off entirely). This way, when either spouse dies, the remaining spouse will have money to pay for the entire mortgage so that he or she does not have to dread the prospect of foreclosure or repossession of the house.

• Couples who just became parents. A joint life policy will help provide for the children’s needs if one of the couple dies before the children are grown.

• Couples who are retiring. A joint life policy will provide the surviving spouse with living expenses.

Some considerations:

• Replacement policy. For a joint life first death policy, the death of one spouse will leave the other spouse without insurance cover. Once the policy pays out, the cover terminates. A replacement policy ensures that the surviving spouse still has life insurance cover. This is issued when the existing policy is terminated due to the spouse’s death. The maximum term and policy amount will usually be based on that of the existing policy’s.

• Type of cover. Before getting a joint life policy, it is also important to think of whether two single life policies or one joint life policy is the more appropriate choice. The income levels for the spouses may be different and they may need different life insurance plans.

To secure your family's future, fill in the form on the right and get your term life insurance quote now.