Death is one of the inevitable realities that people don’t like to think about. However, it is crucial to plan for when it comes to the security and well-being of any surviving family members.
Joint life insurance can help a couple prepare for the worst without taking away from the joy of day to day life.
Joint Life Insurance
Joint life insurance refers to a life insurance policy taken out by two people together. People who qualify for joint life insurance include couples who are legally married, registered civil partners or who are cohabitating and share joint financial obligations such as a mortgage. There are a number of things to consider when choosing between joint life insurance policies or separate individual life insurance policies. An insurance agent can help determine which would be better suited to a couple’s specific needs. It’s also important to determine which type of joint life insurance policy would be most appropriate – a first death or second death life insurance policy.
First Death vs. Second Death Joint Life Insurance
A first death joint life insurance policy provides a lump sum payout after the death of one of the couple. The surviving member of the couple receives the payout or a specific percentage of the payout depending on the policy’s terms and conditions. This type of policy is more expensive and provides more coverage than a second death life insurance policy which provides a payout after the death of both members of the couple. The second death policy may be most beneficial in situations where both members of the couple are income earners. In that sort of situation, the surviving couple member may not be as needy of an insurance payout to withstand the loss financially.
Joint Life Insurance vs. Individual Life Insurance Policies
There are some important differences between joint life insurance and individual life insurance policies that should be noted. Joint life insurance policies are, generally speaking, less expensive than having two separate policies. However, this lower premium cost means that less coverage is being purchased as well. It may make sense for couples to have separate individual life insurance policies in place to make sure that the survivor has a large enough lump sum payout. This is even more applicable in situations where only one member of the couple earns a steady income.
Joint Life Insurance Costs
The costs associated with joint life insurance can vary widely between different insurance companies. However, insurance companies look at a number of the same factors including:
• Amount of coverage purchased – what the policy’s lump sum coverage is
• Age of the people to be insured
• Medical history of the couple
• Gender – men generally have higher premiums because of their shorter life span and different lifestyle patterns
• Occupation – some occupations are deemed to be “more risky” than others such as police officers and fire fighters
• Hobbies and interests – some hobbies, such as sky diving, can make premium amounts higher
• Smoking status – people must be tobacco free for at least one year to be considered a non-smoker
• General health – such as weight, blood pressure and cholesterol levels
• Pre-existing conditions – some conditions may preclude qualification for life insurance whatsoever
• Medical exams – some insurance companies may require couples to undergo medical exams to qualify for joint life insurance
These factors help a company to perform a risk assessment on the couple and determine how much premium costs should be. Check with individual insurance companies for their specific determining factors for premium costs and insurability.
Medical exams may be necessary to obtain joint life insurance coverage. The results of these exams are used to help determine whether the couple qualifies for insurance and how much the premium costs should be. Some companies require that the couple to be insured undergo testing to renew the policy after specific periods of time – such as every year or every 5 years. This allows the company to adjust premiums up or down as the couple’s medical health changes over time. These changes in premium costs do not mean that the amount of coverage has changed, just that the cost to have that amount of coverage has.
It may be tempting for people applying for joint life insurance to leave out some details that would increase the cost of the insurance policy. However, not including important information or not being honest on insurance forms means that the insurance company does not have to fulfill the obligations specified in the policy. A policy can be declared null and void if it is determined that the policy holders did not practice full disclosure.
How Much Coverage to Get
The general rule of thumb on life insurance is to get 7 times the amount of the yearly salary earned for coverage. This amount would need to consider a couple’s joint yearly salary in the case of joint life insurance. However, this average varies wildly depending on individual circumstances. More coverage might be deemed necessary if a couple carries a heavy debt load, such as mortgage and student loans. Less coverage might be deemed necessary if a couple is debt free or of advanced age. Insurance companies can help couples make the calculations necessary to purchase the right amount of coverage for their situation.
Joint Life Insurance Quotes
It’s important to get price quotes for joint life insurance from a number of different companies to make sure that the best possible price is obtained. Our service provides quotes from the top ranked insurance providers in the UK to make sure that customers get the best policy at the best price. Get the quote process started by filling in our free, no obligation form today.
It is not pleasant for anyone to think about death – let alone the death of themselves or their loved ones. However, the eventuality needs to be carefully planned for. Joint life insurance policies are a great choice for couples who are looking for a way to ensure that the future is financially secure.