Joint Life Insurance: Support Your Spouse When You Are Gone

After you fall in love and get married, you spend a lifetime doing everything together as a team. You eat dinner together, raise kids together, buy a home together. So why not get life insurance together, too? Joint life insurance is an option that many married couples overlook, but it can offer some distinct advantages. By selecting a first-to-die life insurance plan, you can arrange to provide a stable financial future no matter which partner dies first.

Plan for Your Loved Ones’ Future with Life Insurance

• Total number of current U.S. life insurance policies: 274,836,000

• Average value of an individual life insurance policy: $168,000

• In 2015, 40% of Americans had no life insurance.

• 30% of Americans report serious concerns that their life insurance will not be sufficient.

Life insurance is a safety net that you leave behind for your family. By paying into a policy throughout your lifetime, you guarantee that your beneficiaries will receive a minimum pay-out at the time of your death. This money can be used to pay for your burial, your child’s education, and your loved ones’ living expenses after you are gone.

Consider Joint Life Insurance

Most traditional life insurance policies are designed to cover individuals, but today’s married couples can also opt for joint policies. You can find joint life insurance policies in many shapes and sizes, but they are typically broken down into two categories: first-to-die life insurance and second-to-die life insurance. The major difference is when the death benefit will be paid. Depending on a couple’s age and financial situation, each policy could have unique advantages or drawbacks.

First-to-die life insurance is much like a traditional life insurance policy, acting as a replacement for income after a spouse dies. While both spouses are covered in the plan, it will only pay out one death benefit, at the time the first spouse dies. Many couples choose this option because it provides the money needed to pay for children to go to college, pay off debt, or maintain a normal lifestyle for the remaining spouse.  

Advantages of a First-to-Die Life Insurance Policy

If both spouses are planning to purchase life insurance, it might be less expensive to invest in a joint policy. It also simplifies things by allowing you to make one premium payment rather than two. Another major benefit of first-to-die term life insurance is that you will be able to access the benefits of the policy sooner than if you both had smaller individual policies. This can make life much easier on the surviving spouse by providing a financial buffer after the loved one dies.

Potential Problems with First-to-Die Life Insurance

The major drawback is that the surviving spouse will leave behind no additional death benefits for heirs. There is only one pay-out, so the surviving spouse will have to buy another life insurance policy (which could be quite expensive if advanced age is involved) or carefully plan how the money is used so that it will also provide benefits after their death. If either spouse is not committed to careful money management, it could actually cause more problems than the first-to-die policy was meant to solve in the first place.  

The Other D-Word: Divorce

When you’re dealing with life insurance, you have to talk about death, but what about the other D-word? The most common question about joint life insurance is usually, “What about divorce?” If a couple decides to divorce with a joint life policy in place, it can get a little complicated. However, this can be avoided by asking for a rider at the time the policy is purchased that would split the joint policy into individual policies in the event of a divorce.

Find the Right Life Insurance Policy for You and Your Spouse

Whether you want to invest in a first-to-die joint life insurance policy or you are still exploring your options, one of our independent insurance agents can help. Our agents will take time to answer your questions, help you think through different scenarios, and compare premiums to find the most affordable and valuable life insurance option for you and your spouse.