Tips for Choosing Between a Individual or Joint Life Insurance Policy


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Owning a life insurance policy is one of the best ways to keep providing for your family even if you are no longer around. A life insurance policy provides immediate tax-free funds that can prevent your loved ones from financial devastation due to unexpected death.

If you have young children, leaving behind money can provide them with food, clothing, and the necessities it takes to raise a child. It can also enable your spouse or partner to put them through college, in the later years.

For a spouse, leaving money behind can help them stay financially on their feet while adjusting to the loss and even pay for any remaining final expenses such as burial costs or medical debts not covered through a health insurance policy.

Life insurance has significant importance and when it comes to purchasing, it may raise the question as to whether or not you should buy an individual life insurance policy or joint life insurance policy?

For example, if you’re already married, you may be wondering if you should skip individual life insurance and go with a joint policy instead? The answer to this question really depends on your situation.

Take a look at this individual and joint-life insurance guide and find out if it’s the right step for your family.

What Is Joint Life Insurance?

A joint life insurance policy is when two lives are insured under the same life insurance policy. Joint life insurance is also and more commonly referred to as survivorship life insurance or second to die life insurance.  

This enables two people, like a husband and wife or even business partners, to be covered under the same life insurance plan, which saves them the trouble and cost of buying two separate plans for themselves.

Typically, these types of life insurance policies are only available on universal life insurance and whole life insurance. They are also only available with a select few life insurance companies making them a rare life insurance coverage option.

As far as a joint term life insurance policy, it really is non-existent. There are companies that offer the option to add a spouse term rider, but this again only applies when the primary insured is purchasing either a universal or whole life insurance policy.

Who is Eligible to Purchase Joint Life Insurance?

As with any type of life insurance coverage, there must be an insurable interest between both individuals involved. A perfect example would be a married couple and possibly cohabiting partners if there is a strong insurable interest between each other. This means that the two parties must stand to be financially impacted should the other partner pass away.

Joint life insurance can also be used in a business setting when two partners or co-owners of a company are insured under a joint life insurance policy. This allows for a surviving partner to have access to the cash build-up of the life insurance policy should the other partner pass away.

The Different Types of Joint Life Insurance

Before you can consider joint insurance as a viable option for you and your partner, it’s going to be very important to understand the different types and how they work. The type you get will depend heavily on your lifestyle and what will work the best for your family.

Here’s a breakdown of the two main types of joint insurance.

First-to-Die Life Insurance

This kind of joint life insurance acts similarly to any individual life insurance policy. Its main goal is to act as a replacement for the beneficiaries when the primary income earner passes away. The surviving partner is then paid a lump sum.

So this is a good option for couples who predict sending their kids to college in the future, have debt they’ll need to pay off, or just need a way to keep taking care of the family when the primary income earner is gone.

Second-to-Die Life Insurance / Survivorship Life Insurance

Just like the first-to-die plan pays out when the first partner dies, the second-to-die plan doesn’t kick in until the second partner passes away. Because of this, second-to-die policies are also called survivorship policies.

Both partners have to pass away before any of the money is paid. When the time comes, the money is given to the policyholders’ beneficiaries.

This type of life insurance policy works best for couples with high net-worths that may be facing estate taxes. The death benefit would be paid out to the beneficiaries to pay off estate taxes, but it can also be a way for couples to leave a legacy for their loved ones.

Because you won’t get any money until both partners are gone, this isn’t a good policy if you have a lot of young children to provide for.

Second-to-Die or Survivorship life insurance policies should really only be considered if your estate is large enough that it could be facing estate taxes.

The Problems with Joint Life Insurance

Unfortunately, joint life insurance comes with a few negative components. This doesn’t mean these policies aren’t still an option for your family, but you should consider the pros and cons carefully before you choose one.

Disadvantages of First-to-Die Life Insurance

The biggest disadvantage to a first-to-die life insurance policy is that the insurance policy stops when the first spouse dies. That means the second spouse is no longer insured.

This isn’t necessarily always a big problem. In some cases, the second spouse can just go apply for another policy. But this can be a hassle, and in some cases, it can be extremely difficult for a surviving spouse to find another insurance policy that will work for them.

First-to-Die life insurance policies are also very difficult to find. There are very few life insurance companies that offer them.

Disadvantages of Second-to-Die Life Insurance

The money only comes when both partners die, and there can be quite a long stretch between both deaths. The biggest disadvantage of second-to-die life insurance is the surviving partner won’t get anything when their spouse dies.

That can be difficult, especially if the spouse that passes away is the main income earner or if there are several kids to take care of.

Other Joint Policy Disadvantages

It’s time to talk about divorce.

Some joint insurance policies will split into two different individual policies if a couple gets a divorce. Others won’t. Meaning you can be stuck with a joint policy even if you aren’t together anymore.

Some policies will only be flexible with your situation if you meet certain requirements within a certain time. If you don’t make the changes by a specific deadline after the divorce, you’ve missed your chance.

Divorces are messy, so meeting this deadline could be completely impossible, depending on your situation.

Are Joint Life Insurance Policies Ever Worth It?

They can be, but again, it all comes down to your specific situation.

One of the main benefits of joint insurance policies is that they can be more affordable than purchasing two separate life insurance policies. Underwriting can also be a little more lenient if one of the insureds has health issues as long as the second insured is rather healthy.

However, the biggest thing to keep in mind is how they both payout. In most cases, this is not a feasible option for families especially when young children are involved.

Because it’s not a feasible option for many, it has become harder to find companies that offer this type of coverage. Most people prefer to have their own individual life insurance policy as it makes much more sense for their family.

Whether you’re looking for joint life insurance or an individual life insurance policy we can help. Top Quote Life Insurance provides instant online quotes from multiple life insurance providers.

Contact us and we can get you the policy you need.

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Jeffrey Manola

Jeffrey Manola

Jeffrey Manola is an experienced life insurance agent and the founder of Top Quote Life Insurance. His mission when he created Top Quote Life Insurance was to provide online consumers searching for life insurance with the absolute best quotes for term life insurance, permanent life insurance, no medical exam life insurance, and burial insurance.

Not only does he strive to provide you with the best rates for your life insurance coverage, but he also wants you to be well informed about the different types of life insurance options that are available. You will also find a significant amount of valuable information on the multiple life insurance companies that can provide you with coverage.

Jeffrey Manola is licensed to provide expert advice and help aid in the purchasing process of life insurance products. He is licensed with the National Insurance Producer Registry (NIPR) in the following states:

AL: 790866 AR: 14358927 AZ: 14358927 CA: 0K29801 CO: 531038 CT: 002536246 DC: 3000281706 DE: 3000190912 FL: W383615 GA: 3089339 HI: 482421 IA: 14358927 ID: 646048 IL: 14358927 IN: 3100885 KS: 14358927 KY: DOI-986908 LA: 758187 MA: 2045330 MD: 3000011601 ME: PRN252004 MI: 14358927 MN: 40427014 MO: 8428106 MS: 10519253 NC: 14358927 ND: 14358927 NE: 14358927 NH: 2434852 NJ: 1562332 NM: 14358927 NV: 3299018 NY: LB-1484031 OH: 1117369 OK: 100293583 OR: 14358927 PA: 740709 RI: 3000183893 SC: 14358927 TN: 2383399 TX: 1969337 UT: 648983 VA: 987464 VT: 3426230 WA: 947010 WI: 14358927 WV: 14358927

Never hesitate to reach out to Jeffrey if you need help. Top Quote Life Insurance is more than just an online quoting agency. We want to help you save money, protect your future, and earn your trust (888) 777-7574.

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Or give us a call...888-777-7574