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Joint life insurance: Policies built for 2

May 4, 2017

Married couples looking for a way to lower the cost of life insurance or to make sure their estate is protected from taxes when they die may want to consider joint life insurance.  It's not unreasonable to estimate that a joint survivorship policy would be 20 percent cheaper than two individual life policies.


Joint life insurance comes in two flavors: first-to-die, which pays out to the surviving spouse after the first dies; and second-to-die, or survivorship, which pays a death benefit to the heirs after both spouses are gone.


The most common way joint life insurance is sold is as permanent universal life, with a "cash value" savings component that grows.


Second-to-die protects your heirs

Second-to-die, or survivorship, life insurance is typically geared toward affluent people concerned about the potential for hefty estate taxes on what they leave behind.  Besides being economical, it can be a way for a person who would not qualify for a single life policy to get some coverage, assuming the other spouse is insurable.


First-to-die helps maintain a lifestyle

First-to-die joint life insurance is less common than second-to-die and more costly. A first-to-die policy may be the right product for married people who want a surviving spouse to be able to maintain a certain lifestyle but wants to pay less than the cost of two individual polices. 


Divorce can break up the joint

In the event that the two members of a covered couple decide to go their separate ways, these insurance plans can come with optional riders or clauses that provide for the right to split the policy into two individual ones.

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