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How does joint life insurance work?

Joint life insurance is a single policy that covers two people under one premium and pays out after one or both of them die. Married couples, domestic partners, and even business partners can buy joint life insurance.

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By

Katherine MurbachEditor & Licensed Life Insurance AgentKatherine Murbach is an editor and a former licensed life insurance agent at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.&Tory CrowleyAssociate Editor & Licensed Life Insurance AgentTory Crowley is an associate editor and a former licensed insurance agent at Policygenius. Previously, she worked directly with clients at Policygenius, advising nearly 3,000 of them on life insurance options. She has also worked at the Daily News and various nonprofit organizations.

Edited by

Antonio Ruiz-CamachoAntonio Ruiz-CamachoAssociate Content DirectorAntonio helps lead our life insurance and disability insurance editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.
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Reviewed by

Maria FilindrasMaria FilindrasFinancial AdvisorMaria Filindras is a financial advisor, a licensed Life & Health insurance agent in California, and a member of the Financial Review Council at Policygenius.

Updated|3 min read

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What is a joint life insurance policy?

Joint life insurance covers two people under one policy. It pays out a single death benefit when one or both of the two people insured die, depending on the type of joint policy. 

While buying an individual life insurance policy for each person is usually cheaper, joint life can be a good fit for certain married couples or domestic partners — for example, if one of them isn’t eligible for their own life insurance policy due to health or age reasons. Even business partners who want to protect their business in case one of them passes away can benefit from a joint life insurance policy.

Key takeaways

  • There are two basic types of joint life insurance policies, depending on when the death benefit is paid out: first-to-die and second-to-die joint life insurance.

  • Most joint life policies offer permanent coverage, which means they don’t expire and usually come with a cash value component that earns interest over time.

  • Buying two separate life insurance policies for each individual is typically cheaper than joint life insurance.

Which are the two types of joint life insurance?

There are two main types of joint life insurance: first-to-die and second-to-die. The main difference between both is when the death benefit is paid out to the policy’s beneficiaries

First-to-die life insurance

In first-to-die life insurance, the policy pays out after either one of the two people protected by the policy dies. First-to-die policies are rare, but may be a good option for certain individuals.

  • People in a marriage or partnership where at least one person isn’t eligible for an affordable individual policy due to health issues or any other reasons

  • Couples with shared large debts, like a mortgage

  • Young families

  • A small business ran with a partner

First-to-die life insurance is similar to an individual life insurance policy in that, after one person dies, the surviving partner receives the payout and the policy ends. The surviving partner won’t have to pay any more premiums, and there won’t be an additional payout when they die. 

If the surviving spouse still wants life insurance, they’ll need to apply for a new policy on their own. They’ll likely have to pay more than they would have earlier, too, because life insurance gets more expensive as you age. 

Second-to-die life insurance

A second-to-die life insurance policy, typically called a survivorship policy, pays out the death benefit once both people covered die.

Second-to-die policies are best for couples who intend to use the policy proceeds for estate planning purposes, such as:

  • Covering estate or inheritance taxes

  • Leaving a nest egg for their heirs

Because there can be a long period between the first policyholder’s death and when the death benefit is paid, second-to-die policies aren’t meant to provide financial relief to the surviving partner during their lifetime.

Most survivorship insurance policies are permanent life insurance, which means they never expire and usually come with a separate cash value account that earns interest over time. 

Permanent life insurance is significantly more expensive than term life insurance, which expires after a set term and doesn’t have cash value. Unlike a first-to-die policy, the surviving spouse in a second-to-die life insurance contract is still responsible for paying the premiums after the other policyholder dies. 

If you’re considering getting a second-to-die policy, make sure both partners would be able to continue making payments after the other partner dies. Otherwise, you’ll lose your coverage and forfeit the payout. 

Read more about how life insurance works

What are the pros & cons of joint life insurance?

Pros

  • It can support an estate planning strategy for people with significant assets. A survivorship life insurance policy can help the beneficiaries organize and conserve their inheritance.

  • It can ensure continuation of business as part of a buy-sell agreement between two business partners. If one of them should pass away, the surviving partner can use the death benefit to assist with business expenses.

Cons

  • It can be more expensive than two individual policies. If one spouse has a medical condition or is significantly older than the other, you may pay higher premiums for a joint policy than you would separately.

  • It delays the policy’s payout. If your policy only pays out after you and your spouse die, your beneficiaries could wait years to receive insurance proceeds.

  • It complicates divorce proceedings. Though some insurers offer a rider that will split a joint policy in the event of a divorce, a shared policy still adds complexity to the negotiations.

  • One spouse may need to buy their own policy anyway. If one spouse still needs coverage after the other passes away, they’ll need to buy a new policy, which will cost more due to changes in age or health.

Who should get joint life insurance?

Joint life insurance is less common because most couples find individual policies easier to manage. But a joint policy might make sense for:

  • Couples who can’t afford or qualify for two individual permanent policies

  • A spouse who may have difficulty qualifying for coverage alone

  • Couples planning to leave an inheritance for their children

Do you have to be married to get joint life insurance?

You don’t have to be legally married to buy a joint life insurance policy. If you’re in a domestic partnership or even a business partnership, you could qualify, as long as the two parties involved are financially dependent on one another. Insurance companies call this concept insurable interest.

How to buy joint life insurance

The application process for joint life insurance is similar to that of traditional policies:

  1. Fill out an application with your partner and have a phone call with an agent.

  2. Take a medical exam and wait for underwriting. This is the part of the process when the insurance company reviews your health history to determine your rate. The medical exam is similar to an annual physical that you can take at your own home or office.

  3. Wait for the insurance company to review your application and give you your final rate.

  4. Sign the paperwork to accept your policy, and pay your first premium. Your policy will then go into effect and you’ll be covered.

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If you’re considering joint life insurance, it’s best to work with an independent insurance agent and certified financial planner to weigh the options for your circumstances.

At Policygenius, our licensed experts can answer your questions every step of the way, handle paperwork, and help you secure the policy that’s right for your family.

Read more about life insurance for spouses

Other types of permanent life insurance

Frequently asked questions

Should you get joint life insurance or individual life insurance?

Most people should get individual life insurance policies, which are cheaper and easier to manage.

Do you have to be married to get a joint life insurance policy?

No. While most people who buy joint life insurance are married couples, domestic partners and even business partners can also get coverage on a joint life insurance policy.

What is the difference between a first-to-die joint policy and a second-to-die joint policy?

A first-to-die policy pays out when either person covered by a joint life insurance policy dies, but a second-to-die policy won’t pay out until both people covered by the policy die. First-to-die policies are typically more expensive.

When does joint life insurance make sense?

Joint life insurance might make sense if one spouse doesn’t qualify for an individual policy, or when you need permanent life insurance coverage for long-term coverage or estate planning reasons.

Authors

Katherine Murbach is an editor and a former licensed life insurance agent at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.

Tory Crowley is an associate editor and a former licensed insurance agent at Policygenius. Previously, she worked directly with clients at Policygenius, advising nearly 3,000 of them on life insurance options. She has also worked at the Daily News and various nonprofit organizations.

Editor

Antonio helps lead our life insurance and disability insurance editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.

Expert reviewer

Maria Filindras is a financial advisor, a licensed Life & Health insurance agent in California, and a member of the Financial Review Council at Policygenius.

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