Joint life insurance

Joint life insurance covers two people and is best used for estate planning or covering a spouse who doesn’t qualify for their own policy. Two separate policies are better for most people.

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Amanda Shih

Amanda Shih

Editor & Licensed Life Insurance Expert

Amanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.

Updated|3 min read

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Married couples buying life insurance together have two options: They can each purchase separate policies, or they can buy joint life insurance, which is one policy that covers two people. The two types of joint life insurance are first-to-die and second-to-die (also called a survivorship policy). 

Most couples will benefit most from buying individual life insurance policies. If one spouse has difficulty qualifying for a separate policy, you have permanent dependents, or want to leave an inheritance for your heirs, you might consider joint life insurance.

Key Takeaways

  • Joint life insurance covers two people and is most often bought by married couples.

  • First-to-die joint life insurance pays a benefit after one policyholder dies.

  • Second-to-die joint life insurance pays out after both policyholders die.

What is a joint life insurance policy?

Joint life insurance is a life insurance policy that covers two people. A joint policy serves the same basic purpose as other types of life insurance: It provides your loved ones with financial support if you pass away. 

Most joint life insurance policies are permanent life insurance policies, which last your entire life and have an investment-like cash value feature that earns interest. Joint term life insurance policies, which expire after a set period, do exist but are less common.

How do joint life insurance policies work?

The two types of joint life insurance work in slightly different ways and serve different needs.

First-to-die life insurance

In first-to-die life insurance policies, the policy pays out after the first of the two spouses dies. The first-to-die option is best for people with:

  • Expenses supported by one spouse

  • Large debts, like a mortgage

  • Young families

First-to-die life insurance is the most similar to an individual life insurance policy. It helps your surviving spouse cover expenses after the loss of your financial support. 

First-to-die life insurance policies are also like individual life policies in that once the insurance company pays out the death benefit, the policy is no longer in force. If your surviving spouse still wants life insurance, they’ll need to apply for a new policy.

Second-to-die life insurance

A second-to-die life insurance policy pays out the death benefit once both policyholders die. Second-to-die policies are best for couples who intend for the policy proceeds to go toward estate planning purposes, such as:

  • Covering estate taxes

  • Leaving a nest egg for their heirs

  • Paying inheritance taxes

Because there can be a long period between the first policyholder’s death and when the death benefit is paid, second-to-die life insurance works best as a windfall to a dependent rather than as income replacement for your partner. 

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 one policyholder dies.

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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 you if:

  • Buying two individual policies is out of your budget.

  • One spouse may have difficulty qualifying for coverage alone.

  • The policy’s cash value is part of your retirement plan.

  • You have a lifelong dependent.

  • You plan to leave an inheritance for your children.

Joint life insurance might be the best option for couples who can’t afford or qualify for two individual policies. If you’re considering joint life insurance, work with an independent insurance agent or a certified financial planner to weigh the options for your circumstances. 

Disadvantages of joint life insurance

Joint life insurance works best in specific situations. For the average couple, the disadvantages outweigh the benefits of a joint life insurance policy:

  • It takes longer to get the death benefit. If your policy only pays out after you and your spouse pass, your beneficiaries could wait years to receive insurance proceeds.

  • Cash value isn’t the best investment. Though you or your spouse can use your cash value while you're alive, the rate of return is lower than in a traditional investment account.

  • Joint life insurance complicates divorce proceedings. Though some providers 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 need to buy a new policy, which will cost more due to changes in age or health.

  • Permanent policies cost more than term policies. Permanent insurance premiums are up to 15 times higher than term life premiums. Two individual term life policies may cost less than one joint permanent policy.

  • You won’t save if one spouse has health concerns. 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.

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If your main concerns about buying two separate policies are whether one spouse will qualify or high premiums a spousal rider may be a better choice. It can be added to most life insurance policies to provide a small amount of coverage.

For most people, the simplest and most affordable coverage will be individual term life insurance. If you think joint life insurance is right for you, speak with a licensed professional before making a decision.

→ Read more about life insurance for spouses

Frequently asked questions

How does joint life insurance work?

A joint life insurance policy covers two people and pays out either after one policyholder dies (first-to-die) or after both policyholders die (second-to-die or survivorship).

Should I get joint life insurance or individual life insurance?

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

When does joint life insurance make sense?

Joint life insurance might make sense for you if one spouse doesn’t qualify for an individual policy or you have a permanent life insurance need.