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How does joint life insurance work?

Joint life insurance is a single policy that covers two people under one premium. Spouses, domestic partners, and even business partners can be eligible for joint life insurance.

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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.

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

Expert reviewedExpert reviewedThis article has been reviewed by a member of ourFinancial Review Council to ensure all sources, statistics, and claims meet the highest standard for accurate and unbiased advice.Learn more about oureditorial review process.

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What is a joint life insurance policy?

Joint life insurance is a life insurance policy that covers two people under one premium. It pays out a death benefit when one of the two individuals insured dies.

While buying an individual policy for each person is usually cheaper, joint life can be a coverage option for some married couples or domestic partners — for example, if one of them is not eligible for their own life insurance policy due to health or age reasons — and even for business partners who want to protect the business in case one of them passes away.

Key Takeaways

  • A joint life insurance policy covers two individuals for the cost of one premium.

  • 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.

  • First-to-die joint life insurance pays out when the first of the two people insured dies.

  • Second-to-die, also known as survivorship insurance, pays out only after both individuals insured by the policy have passed away.

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

  • In most cases, buying two separate life insurance policies for each individual is cheaper than joint life insurance.

How do joint life insurance policies work?

While the two types of joint life insurance work in slightly different ways and serve different needs, one thing both have in common is that there’s some kind of financial relationship between the two parties.

Most commonly, the joint policyholders are married or domestic partners, but they can also be business partners.

The two main types of joint life insurance are:

  • First-to-die life insurance

  • Second-to-die life insurance

First-to-die life insurance

In first-to-die life insurance, the policy pays out after the first of the two insureds dies. The first-to-die option is rare but may work for people with:

  • Individuals in a domestic relationship or marriage who are not eligible for their own insurance for health or age reasons, but their partner is

  • Couples with large debts, like a mortgage

  • Young families

  • A small business ran with a partner

First-to-die life insurance is the most similar to an individual life insurance policy. It helps the surviving policyholder cover expenses after the loss of financial support. It’s also similar to individual life policies in that once the insurance company pays out the death benefit, the policy expires.

If your surviving spouse still wants life insurance, for example, they’ll need to apply for a new policy. They’ll likely pay more than they would have earlier, too, because we all become more expensive to insure as we 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 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. It doesn’t provide any income replacement for the surviving 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 the other policyholder dies.

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.

→ Read more about how life insurance works

Pros and cons of joint life insurance

Pros

  • 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.

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

Cons

  • 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.

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

  • 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’ll need to buy a new policy, which will cost more due to changes in age or health.

Separate life insurance policies are best for the majority of people, but if you’re not sure, speaking with a financial planner or insurance professional can help you determine which type of life insurance is best for you.

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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:

  • 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

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 whole life policy that's right for your family.

→ Read more about life insurance for spouses 

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

If you’re seeking coverage for two people, it’s best to speak with a licensed agent to determine which kind of life insurance will be best for your needs. Policygenius has non-commissioned advisors that can recommend the best product for you based on your financial protection goals. 

The application process is similar to traditional policies:

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

  2. Each person applying for coverage will take a medical exam and wait for underwriting, which is when the insurance company reviews their health history to determine the joint rate.

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

  4. Once both of you sign the paperwork and pay your first premium, your policy will go into effect and you’ll be covered.

Other types of permanent life insurance

Frequently asked questions

Is joint life insurance a term or whole policy?

Joint life insurance policies are typically permanent policies, like whole life.

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.

Can you get a joint term life insurance policy?

Joint term life insurance policies are rare. You can also get a rider on a term policy that effectively insures another person — these policy add-ons are usually called spousal riders or other insured riders.

Can a life insurance policy be jointly owned?

Yes — some life insurance policies can cover two people to be insured.

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 when you need permanent life insurance coverage for long-term coverage or estate planning reasons.

Author

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.

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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