Joint Life Insurance is a type of life insurance policy designed to cover two individuals, typically spouses or partners, under a single contract. This form of insurance pays out the death benefit upon the first death of the insured parties. The primary purpose of Joint Life Insurance is to provide financial protection and support to the surviving individual following the death of their partner.
The policy remains active until the first insured individual passes away, at which point the death benefit is paid out to the surviving insured person or beneficiaries. After the death benefit is paid, the policy typically expires and does not continue to cover the surviving person. Joint Life Insurance is often used as a means to ensure that the surviving partner can maintain their standard of living, pay off shared debts, or cover other financial obligations that may arise as a result of the death of the first partner.
There are variations of Joint Life Insurance policies, such as “first-to-die” and “second-to-die” or “survivorship” policies. First-to-die policies pay out after the first death, as described, while second-to-die policies only pay out after both insured individuals have passed away, which is often used for estate planning purposes. Joint Life Insurance can be an efficient and cost-effective way for couples to manage their life insurance needs with a single policy rather than maintaining two separate policies.