There are so many terms, phrases and policies in the life insurance market and it is very common to find yourself getting confused especially when you are not very familiar with it. Anyway, as you learn, you will notice there are various types such as whole life and term insurance.
However, under the two categories, there are more specific variants such as joint term life insurance. Basically, there are no much different compare to standard term life insurance which covers a single individual but joint policy covers more than one person. Usually, married couples or someone you are sharing monetary commitment with, you can consider to be insured under a joint plan. As a result, both husband and wife are protected as well as the children in the event of death. You need to assess your situation and your needs before considering to purchase a joint term life insurance policy.
Some referred joint policy as joint first-to-die term life insurance where the policy benefits is only paid out once. This means there is only one payout to the surviving partner when the first of the two joint policy holders dies. A joint policy might not be suitable for you even if you are married. However, it is a sensible consideration if you have kids, you are home owners or retired to ensure that you provide sufficient protection for your children, to pay off the mortgage and have a comfortable retirement life.
Most married couples would consider to purchase a joint policy under the following situation:
- New homeowners – The most popular benefits if joint term life cover is mortgage protection. A joint life insurance policy ensures that the surviving spouse will be able to pay for mortgages and other related debts.
- New parents – Joint term life insurance covers the expenses of childcare and tuition fees if your spouse passed away before your children are grown.
- Retirees – Joint term life can be used to plan retirement as it allows purchasing an annuity with more choices. Typically, annuity is purchase with options that provides monthly payments until the first partner dies (a single life annuity), or until the remaining partner dies (a last-to-die annuity). The first option offers higher monthly payments without jeopardizing the income for the surviving partner. The reason is because the policy will be paid out to the surviving partner when the first partner dies. If you choose the second options, it will provide the remaining partner a regular monthly income which consider lower than those offered through a single life annuity.
Once you make your decision to purchase joint term life insurance for you and your family, you will need to consider the duration of your policy. Normally, people will choose to cover for 10 or 20 years. If you have young children and just bought a new home, 10 year term is usually sufficient. Couples with older children, have their mortgage paid off or near to retirement can consider longer term.