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Joint Life Insurance

Joint life insurance is an option many couples choose because of the convenience of having only one policy.  However, before you go out and get one of these policies you should examine the pros and cons of this type of policy

How Does Joint Life Insurance Work?

The term joint in these type of life insurance policies really is a nicer way of saying first to die life insurance.  With the cost of term life insurance getting cheaper and cheaper this type of insurance has morphed from being for spouses to being for business partners and most of the time for family owned businesses.  This prevents the one partner from having to worry about the health of the business by not only losing a family member but most likely a key part of the business itself.  It many times is just what a surviving family member needs to keep the business going.

Joint Life Insurance for Inheritance

The one case we see for joint life insurance is in the case of estate planning.  If a child were to lose both parents this type of policy would ensure that the child or children are taken care of.  You would still want a first to die life insurance policy so that in the event of one spouse passing the other is not left to handle all the finance on their own.  Most time we recommend getting two separate term life insurance policies because this can be less expensive and offer more targeted coverage on each spouse.

Disadvantages of Joint Life insurance

The biggest disadvantage of joint life insurance is that if you were to part ways with the other person on the policy you have to both be willing to get out of it.  So if a business splits both partners would have to want to dissolve the insurance policy.  The bigger problem comes in the event of a divorce.  This is just one more item that needs to be separated when separating the estate of two individuals going through this tough transition.  In both of these instances it would be easier to have term life insurance on each person so that all you do is call you agent and have them send you the paperwork to change the beneficiary on the policy.
Joint life insurance can be a good match but you should take a little time and see what the cost of term life policies would be.  Many times you will be surprised to see the cost difference and convenience will work in your favor.  At TermLife360.com we are dedicated to helping you find the best policy or your family.  If you have any questions or if there is any way we can serve you please contact us.

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