Joint Term Life Insurance

Married couples, committed companions and business partners alike must protect their joint assets. That protection often means life insurance policies – and premiums – for each party. It doesn’t have to be that way. With joint term life insurance, one policy covers all parties and pays just once – when the first person dies.

Beneficial for Families
New parents are often strapped for cash, and full of concerns for their child’s future. Joint term life insurance is one solution that addresses both issues. The single insurance policy would cover both parents for the same benefit but only pays when the first parent dies. The child or children will be financially cared for should Mom or Dad pass away unexpectedly, regardless of who the breadwinner of the family is.

Premiums for a joint term life insurance policy covering two parents or providers in the same household are typically just slightly more than the same policy for one adult. This can save anywhere from a few dollars to a few hundred dollars per month. Keep in mind, of course, that should one parent die, the other parent is no longer covered by the insurance policy.

Beneficial to New Homeowners
When you take on a large debt like a home mortgage with someone else, be it your mother, your best friend or spouse, you don’t want to get stuck holding the entire balance should he or she die. This is one such situation a joint term life insurance policy will protect you in the event your co-homeowner dies first, and protect them should you meet an untimely death.

Beneficial for Business Partners
Going into business for yourself is a pretty huge undertaking. Going into business with another person is twice as much risk since it isn’t just your investment on the line but also your partner’s. It makes sense that you’d want the business cared for and all assets properly maintained after you’re gone. What’s more, you wouldn’t want to be left holding the entirety of the debt should your partner pass away.

A joint term life insurance policy can provide benefits for the total business investment or a portion of it (for equal partners.) Some insurers offer policies that cover more than two partners as well, though it is important to keep in mind the policy will only pay out once. Should your business have more than a few partners you would like to insure, you may consider multiple policies with a pyramid of beneficiaries.

Terms and Conditions
While insurers offer a variety of policies with different terms and conditions, you are likely to find options for 5 to 10 years, 10 to 20 years and 20 to 30 years. With term life insurance policies (as opposed to whole life policies), the funds may be forfeited at the end of the term if there have been no claims. A term life insurance policy can’t be used like a savings account, like whole life.

Many insurers will offer a renewable option at the end of the term if no claims have been made. Essentially, the term policy is converted to a whole life policy. The premiums may or may not increase. The benefit may or may not change. Before signing any insurance policy, be it whole life or joint term life insurance, you read and thoroughly understand the conditions of the policy.