Joint Term Life Insurance
There are so many different terms surrounding life insurance that it can get confusing to sort them all out. One of these oft-quoted terms is “joint term life insurance.” If you’re married, it’s worthwhile considering this type of life insurance when deciding which policy and coverage is best for you and your family.
However, before you can determine whether joint term life insurance is the right option for you, you need to understand what it is and what it entails.
Joint term life insurance is sometimes also known as “joint first-to-die term life insurance,” which essentially means that the policy simultaneously insures two people—almost always a married couple—but the benefit is only paid out once—upon the death of the first of the two joint policy holders. When the first partner dies, the life insurance policy will be paid to the surviving or remaining partner.
Joint term life insurance makes sense for couples in several different situations—if they’re homebuyers, parents, or retirees, in particular.
Joint term life insurance is a worthwhile consideration for you and your family if it takes both partners to make the mortgage payments, care for and financially provide for your children, or to maintain your current or desired retirement lifestyle.
Many couples choose the joint term life insurance option for mortgage protection, whether they’re new homeowners or have been paying off their mortgage for several years already. Should one of you die prematurely, a joint term life insurance policy will ensure that the surviving partner will be able to continue making mortgage payments.
Parenthood is another common and excellent reason for choosing a joint term life insurance policy. Children need to be looked after and cared for, and can also be expensive. If you or your spouse dies before the children are grown or out of school, joint term life insurance coverage will help the remaining spouse to be to make ends meet as a single parent and pay for child care or tuition, or other child-related expenses.
Joint term life insurance is also very helpful for retirees as a complement to their retirement plan. Couples can decide between a single life annuity (when the first partner dies) or a last-to-die annuity (when the remaining one dies).
Couples can also choose between a 10-year and a 20-year joint term life insurance coverage policy. The shorter term is generally recommended for couples who have young children or have recently purchased a home, and the longer term is more suitable for couples whose children are older (preteens or teens) and who have already made a dent in their mortgage.
If you would like more information on joint term life insurance, or if you’re not sure whether this type of coverage is a good option for you and your family, it’s advisable to talk with a life insurance agent to discuss your options, the benefits, the downsides, as well as the rates.