What is a joint life insurance policy?

Answer:
Joint life insurance policies are policies that

cover two people such as a husband and wife. They usually come with a “first to die” clause which means the benefit is paid once when the first of the two covered individuals dies. However, some policies do not have this clause and pay out only after both individuals have died.

For example, in a first-to-die joint life insurance policy, when the first person dies, the surviving spouse will receive the death benefit. This allows the spouse to maintain the household, pay for college for the kids, continue paying the mortgage or whatever else they need the life insurance for.

If the couple were to have purchased a joint life insurance policy that pays out after each of the individuals have passed away, then their beneficiaries will receive the death benefit.

If you do not know the difference and think you’ve purchased a first-to-die policy but really have the other kind, you’ll find yourself in a bind should your partner pass away. However, depending on your intentions, joint policies that pay after both individuals die may be appropriate.

For example, if you are a retired couple who wants to leave a legacy for your heirs, this could be one way to do so.


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