Joint Term Life Insurance: The Basics
Life insurance can be a tricky thing. There are term life policies, whole life policies, riders, cash out values and many other terms that are thrown around that makes your head spin, so if you don’t know what joint term life insurance is then not many people would blame you. However, if you are married then joint life insurance is definitely something you should educate yourself on.
What is a Joint Term Life Insurance Policy?
Joint term life insurance policies are ones that can be purchased by married couples or common law couples and pays out to the surviving spouse when one dies. Because of this, these insurance policies are also known as first to die term life insurance. The benefit of this type of policy is only paid out once. When the surviving spouse dies, no further benefit from a joint term life insurance policy is paid out to surviving beneficiaries.
In a world where two income families are the norm, this type of life insurance policy can be extremely attractive. For instance, if a husband and wife both contribute to the finances of the family, a joint life insurance policy will help to replace the income of the spouse that dies helping the survivor raise the children and provide for the household expenses that they would face in single parenthood.
Joint term life insurance policies also offer mortgage protection if both husband and wife contribute to the mortgage payments. In the event of the untimely death of one spouse, the other will still be able to make the monthly payments with the money received.
What Considerations Are There?
Like any type of insurance policy, joint life insurance isn’t something you simply buy off the rack. There is no one size fits all policy that makes this a quick process.
The first consideration is the length of the term for the policy. Generally, joint term life insurance policies cover a married couple for 10 year or 20 year terms.
The next thing to consider is the amount of coverage. The policy you purchase should provide a benefit that will sustain your costs of living without either person’s income. Many times people think that they can purchase a lesser policy and make do with less only to find that they don’t have enough money to cover the basics like utilities, car payments, tuition and housing. Also, make sure that the policy you purchase will cover future earnings.
Next consider renewal rates for this type of policy. Some insurance companies will allow you to renew your policy at a guaranteed rate until a certain age, usually 80 to 85. Renewals can often take place without the need for a medical exam prior to extending coverage.
Finally, you should take into consideration other life insurance policies that you have already purchased. Sit down with someone who can help you plan for the worst possible scenario and make sure that you and your family are protected. A joint term insurance policy can then be used to fill in any gaps that you may find.
Jeff Orloff writes on insurance related topics for the Term Life Insurance (http://termlifeinsurance.org) blog hosted by the Consumer Media Network.
