Joint Life Insurance: What You Need to Know Before Buying One.

You must be aware of numerous types of insurance policies but are you familiar with joint life insurance? When a married person losses their partner, financial difficulties is one of the few challenges they want to face.

For couples whose partner is the breadwinner or plays a huge role in financial responsibilities that keeps the relationship and family on a good trajectory, joint insurance covers can protect either when life happens.

A joint insurance policy protects two partners or people under one policy cover while a life insurance policy covers your dependents in the event of death.

Types of Joint Insurance? 

As the name suggests, joint insurance offers the opportunity to cover oneself and a partner under one contract. 

It is a comprehensive plan with multiple benefits for partners. It ensures that if either of you dies, the other person and dependents are not left stranded. A general misconception about joint insurance is that it is only for couples. In contrast, two people with common dependents can have a joint insurance policy together. 

For example, business partners can have a joint insurance plan to ensure that no one is stranded. If one person dies, the other person can continue to operate the business without more financial burden.

There are two main types of joint insurance that largely depend on when benefits are paid. They are; First-to-die and Second-to-die policies. 

First-to-die Policy: Typically, two people are covered, and when one person dies, insurance benefits are paid to the other surviving partner or a named beneficiary. If a couple gets this kind of policy and the husband dies, the wife or any named beneficiary receives the insurance benefits. 

The benefit received can be used for any purpose. This just means that the other partner no longer has any insurance policy covering them. 

Second-to-die Policy: For this policy, benefits are only paid to a named beneficiary when both partners pass away. Although sometimes, the beneficiaries of this second-to-die policy are usually couple’s kids or relatives, it is not always the case.

This policy is also widely used to transfer assents to a non-relative, a friend or a business associate. It doesn’t even have to be a person. The policy’s payout can be used to leave a legacy for charity, religious organizations, fundings or even a family trust. 

Benefits of Joint Insurance Policy

  1. It is a more affordable insurance cover: One of the significant benefits of joint life insurance is that premiums are relatively cheaper. Premiums for joint insurance cost less than two individual life insurance policies. This means you and your partner can enjoy the benefits of dual cover at a lower price. 
  2. Income replacement for dependent(s): Some Insurers allow payment flexibility. Depending on your partner’s or written beneficiary’s needs, the benefit can be paid in a lump sum or in monthly instalments. This can encourage a better budget arrangement and income planning for your dependents. 
  3. Tax Advantage: With the joint life insurance policy, premiums paid are deductible. What this means is that it is a part of your income that cannot be taxed. The benefits paid out to dependents are also totally tax-free.

Why Joint Life Insurance Might Not Be Suitable For You. 

  1. In a first-to-die policy, the other partner is left without insurance cover: Once one partner dies, the other partner gets the payout but no longer has life insurance protection. At that point, the other partner must have been significantly older, and individual life insurance can get expensive. Premiums become higher as a result of age. 
  2. Benefits paid are generally lower than benefits paid on two individual Life Insurance: The benefits paid out to dependents of two separate life insurance policies combined are always way higher than the benefit paid on a joint insurance policy. 
  3. The health issues of one partner can increase premium costs: The cost of a Joint life insurance premium is heavily influenced by the health status of both partners. The premium cost is calculated based on partners’ average health status and life expectancy. So if one person is less healthy, the cost of premiums will be increased. 
  4. This kind of Insurance gets complicated when partners split: While separation or divorce is by no means a certainty, it can still happen. It is challenging to separate joint life insurance. Some insurance companies allow coverage to be split into two individual life insurance plans. This however, depends on the contract at the beginning of the policy. This provision is not common. For an insurance company that does not have an optional provision for splitting Insurance, you may have to succumb to coverage lapse if you are not comfortable continuing a policy tying you and your partner that has fallen out. 


Now that you have read this article, do you think joint life insurance is the right insurance policy for you and your partner? Many factors should be considered when deciding to get joint insurance. Coupled with all the details provided in this article, you should discuss with your partner to find out if joint insurance works for them. Do a little more research once you are convinced that joint insurance is right for you and your partner. Proceed to get the right insurance company that offers the level of flexibility that you want. Don’t forget to ask as many questions as needed from your chosen insurance company.

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