What Is First-to-Die Life Insurance?

First-to-die life insurance insures two people but only pays a benefit when the first policyholder dies.
Robin Hartill, CFP®
By Robin Hartill, CFP® 
Edited by Lisa Green Reviewed by Tony Steuer

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

First-to-die life insurance is a life insurance policy that insures two people’s lives, but it only pays a benefit after the first policyholder dies.

It’s one of two types of joint life insurance, which covers two lives under a single policy. The other form of joint life insurance is called second-to-die life insurance, and it only pays a death benefit after both policyholders have died.

First-to-die life insurance is a relatively rare type of life insurance. It’s sometimes used by married couples when both spouses work and want to provide income replacement for the surviving spouse. For example, a first-to-die policy could help a surviving spouse pay off their mortgage or fund education expenses for children if the first spouse dies during their earning years.

Business partners sometimes purchase first-to-die life insurance, as well. Upon the death of the first partner, the surviving partner will use the life insurance payout to help with business expenses or purchase the deceased partner’s share of the business from their heirs.

Insurers will consider both applicants’ age and health history in determining whether to issue the policy and how much coverage they’re willing to offer. Buying a single first-to-die policy is usually cheaper than buying two separate comparable policies with the same death benefit because even though two lives are insured, the insurance company only needs to pay one death benefit.

Keep in mind, though, that most joint life insurance is issued as permanent life insurance, which is typically far more expensive than term life insurance. If you’re considering a first-to-die policy, be sure to compare the cost of obtaining two separate term policies. Obtaining two separate permanent policies may be more expensive than a first-to-die policy, but buying two separate term policies could still be cheaper than a single first-to-die policy.

Because first-to-die life insurance is an unusual product, you’ll need to work with a life insurance agent or broker to purchase a policy. Be sure to discuss the alternatives before you choose this type of coverage.

Learn more about life insurance for families

Get more smart money moves – straight to your inbox
Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money.