What Is Joint Life Insurance?

When you buy life insurance, you’re typically buying coverage only for yourself. But if you are married, have a life partner or co-own a business with someone else, you may be able to buy joint life insurance to insure both of your lives.

Joint life insurance covers two people instead of one person under the same policy. Spouses or domestic partners can get joint coverage. These types of policies are often referred to as married couple life insurance.

In addition to couples or spouses, joint life policies are sometimes used by business partners so that when one person dies, the surviving partner can use the death benefit to ease the financial burden on the company or buy out the deceased partner’s share of the business.

Some insurers offer joint term policies, which only last for a specified period of time. But most joint coverage is issued as permanent life insurance, which typically lasts for a lifetime and also builds cash value. There are two basic types of joint life insurance: first-to-die and second-to-die policies.

First-to-die joint life insurance

First-to-die joint life insurance is a policy that pays a death benefit to the surviving partner or spouse when the other one dies.

If you have first-to-die joint life insurance and your spouse or partner dies, you’d have to apply for a policy on your own if you still need life insurance. This could be difficult if you’re older than you were when you bought the joint policy or if your health has declined.

Second-to-die joint life insurance

Second-to-die joint life insurance is also called “survivorship life insurance.” It pays out only when both people covered by the policy have died.

If you have survivorship insurance and your spouse or partner dies, you won’t get a death benefit. You’ll also usually need to continue paying the premiums to keep the policy in force. When you die, the death benefit will go to your life insurance beneficiaries.

Some wealthy couples choose a second-to-die policy to cover probate expenses and estate taxes. Couples may also choose survivorship insurance to provide for a child with a disability or leave a financial legacy for charity.

As with other policies, your eligibility for joint life insurance depends on a number of factors. This includes your age and health (and your partner's or spouse’s) and the amount of coverage you’re applying for.

Someone who’s older or has health problems may have an easier time qualifying for second-to-die life insurance because the insurer probably won’t have to pay a death benefit until the healthier person dies. But the opposite can also happen. A partner's health problems, age or tobacco use could mean less coverage or drive up your premiums, especially if you’re buying a first-to-die policy.

Still, a first-to-die policy may make sense for couples with a specific financial commitment, like paying off a mortgage or funding a child’s college tuition, rather than replacing income. That’s because a first-to-die policy is usually cheaper than paying for two separate policies with the same death benefit.

With a second-to-die policy, pricing often reflects the life expectancy of the younger, healthier person. With both types of married couple life insurance, the insurer has to pay a death benefit at some point — but they prefer pushing that out as far into the future as possible.

Joint life insurance can help couples qualify for lower premiums than individual policies with the same death benefit. Why? Joint life insurance covers two people but only pays one death benefit.

Say you’re considering two individual policies worth $500,000 or a joint life policy that would provide one $500,000 death benefit. The joint policy would usually be cheaper because the insurer only needs to pay one $500,000 benefit instead of two benefits totaling $1 million.

Joint coverage could also help couples qualify for a higher coverage amount. Suppose you want to leave a $1 million death benefit and are shopping for two single $500,000 policies vs. a $1 million joint life policy. The insurer estimates your life expectancy is 20 years, compared to 30 years for your partner or spouse.

The insurer would expect to pay $500,000 in 20 years, then another $500,000 in 30 years —or $1 million total. But with a second-to-die policy, the insurer wouldn’t have to pay any of the $1 million benefit for 30 years.

To decide if a joint life insurance policy is the right fit for your situation, it’s worth speaking to a life insurance agent. Joint life insurance is sold by several companies, including the following top-rated insurers. However, joint policies aren’t as common as individual policies and can be hard to shop for online.

A joint life insurance policy may be worth it in a few specific situations, especially if one person has an underlying health issue that might make it too difficult or expensive to get coverage. But before you shop for joint life insurance, be sure to look at the costs of two individual policies, as well as how much coverage you’d each qualify for.

Consider a first-to-die joint life policy if…

You can’t afford two separate policies, particularly if you both work and earn similar amounts. If one person dies, the survivor can use the death benefit for expenses or to pay off a significant debt, like a mortgage.

Consider a second-to-die joint life policy if…

You have specific estate planning needs — for instance, if you’re worried about estate taxes, want to leave a benefit for a child with a disability or you’re building a financial legacy for heirs or a charity.

Alternatives to joint life insurance

If joint life insurance isn’t a good fit for your family, consider one of the following approaches to meet your life insurance needs.

• Buy individual term policies for each person. The simplest solution is to apply for individual term life policies, especially if both people are younger and healthy. Term life insurance is sufficient for most families, but if providing a death benefit no matter when you die is important to you, you could also shop for individual permanent policies.

• Purchase a life insurance policy with a spouse rider. A spouse rider is a policy add-on you can purchase. It pays a death benefit if your spouse dies while the rider is in effect. The death benefit for this life insurance rider will typically be lower than you’d get if your spouse had their own policy. However, if they can’t qualify for life insurance, a spouse rider offers some protection.

• Guaranteed issue life insurance. If one person can’t qualify for their own policy and you’re worried about paying for final expenses, guaranteed issue life insurance is an option. These policies are available regardless of your age or health, but the death benefit is minimal.