Joint Life Insurance
As opposed to survivorship life insurance (also known as "second to die life insurance"), joint life insurance is intended to provide a benefit upon the death of the first spouse or business partner. Joint life insurance protects the widowed spouse upon death of a husband or wife. It also provides adequate protection for a business should a key executive or partner in the business pass away.
Joint Life Insurance Costs
Joint life insurance is cheaper than survivorship life insurance because it only covers one person. Additionally, joint life insurance is cheaper than purchasing a separate life insurance policy for each spouse. The cost of joint life insurance will depend on a variety of factors, including the age of each spouse, their health, the length of coverage requested, and whether the policy is whole life coverage or term life coverage.
Benefits of Joint Life Insurance
One major benefit of joint life insurance is that the underwriting requirements are easier to meet - especially if one of the spouses is healthy. One great feature of joint life insurance policies is that you have the choice of the style of life insurance policy that you want attached - whether it's whole life or term life. You can also take out a loan on the cash value that a whole life policy would build up (if you choose to attach whole life to your joint life insurance plan).
Joint Life Coverage vs. Survivorship Plans
Joint life insurance has one major difference with survivorship life insurance: Survivorship coverage is intended to pay the benefit only when the second policy-holder dies. Joint life insurance, on the other hand, pays out when the first policy-holder dies. Survivorship life insurance is ideal for those who want to provide estate tax protection from potential heirs, especially if the individuals who are covered have a net worth greater than two million dollars. Joint life coverage is ideal for couples who want to provide protection to their spouse - no matter which spouse dies first. It's also a helpful tool when one of the two spouses finds it difficult to meet underwriting requirements.
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