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What Is Joint Life Insurance?

Joint life insurance is a single policy that covers two people, whether they’re a married couple, business partners or family members. While a joint policy usually has lower premiums than buying two separate policies, it’s not the right answer for everyone.

Here’s what you need to know about joint life insurance and how to determine if it’s right for your situation.

Joint life insurance is one life insurance policy that covers two individuals with shared assets. They can be a married couple, domestic partners, relatives, or even business partners.

These types of life insurance pay a death benefit one time. When a joint life insurance policy will pay out depends on which type of coverage is purchased.

First-to-die coverage

This coverage is meant to support the surviving policyowner, helping them replace income, care for children or cover debts like a mortgage. Since joint life insurance only pays out once, the survivor would need to purchase a new policy if they want continued coverage.

Second-to-die coverage

Second-to-die coverage leaves money for heirs after the passing of both individuals. Also called survivorship insurance, it can help with estate planning, including for individuals who want to transfer wealth with potential tax benefits to their children, grandchildren or a favorite charity. It can be a good option for couples with enough money that the surviving spouse won’t need to count on the death benefit from a traditional life insurance policy. If one partner is the primary breadwinner, though, it may not be the right option.

Several companies offer joint life insurance, including a few of CNBC Select’s top picks for life insurance.

State Farm offers a Joint Universal Life Insurance policy and has high customer satisfaction and financial strength ratings.

State Farm Life Insurance

  • Cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy highlights

    State Farm offers a variety of term, whole, and universal life insurance products to choose from, alongside other types of insurance. It’s rated highly for both financial stability and customer service.

Guardian received an A++ rating for financial strength from AM Best. It offers joint life insurance through its EstateGuard plan, a whole life insurance policy.

Guardian Life Insurance

  • Cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy highlights

    Guardian offers a variety of policies, including term, whole and universal. It also offers term policies that can be converted into whole or universal life policies, along with strong financial strength ratings.

Most people should get individual life insurance policies, but joint life insurance may make sense if a couple can’t afford or qualify for two individual policies. In addition, a second-to-die policy may be a good option for parents who want to provide a death benefit for a child with a disability.

Business partners who want to plan for their company’s future may opt for first-to-die coverage. The surviving partner could use the death benefit to cover business expenses.

If you’re considering joint life insurance, know that it will almost certainly be a permanent life insurance policy, since there are very few joint term-life policies available. Permanent life insurance — including whole life insurance and universal life insurance — offers coverage for the remainder of your life. It consists of a death benefit, paid out after you pass, and a cash value component that can be accessed while living. If you’re looking for term life insurance, having both partners get policies can provide protection for two people for a set number of years, generally between 10 and 30 years.

While there are definite pluses to a joint life insurance policy, there are drawbacks, too. Here’s what you need to consider:

Pros of joint life insurance

  • It can make coverage cheaper. If you can’t afford to pay premiums on two separate policies, a joint policy is generally less expensive.
  • It can help provide coverage for someone who otherwise wouldn’t qualify. If one partner is unable to get insured because of an underlying health problem or other issues, a joint policy could provide coverage.

Cons of joint life insurance

  • It can be complicated divorce. Unless the policy has a rider, or a customized benefit spelled out at the beginning, second-to-die policies can be difficult to administer if a couple splits.
  • It can leave one person without coverage. In a first-to-die policy, the surviving partner would need to buy a new life insurance policy, which could be more expensive with age.

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Joint life insurance can help with estate planning and protect you after the death of a spouse or business partner. But they can be hard to split and may not fit every couple’s financial goals.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every life insurance review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of life insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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