Life insurance is traditionally designed for young people with kids, and that is why in the past it usually covered only the life of the primary breadwinner of a family. Hopefully, the time has changed, particularly with the rise in the number of working couples and necessity for life insurance in older age. Therefore, today we can find decent policy no matter the age and health condition. Life insurance for married couples is essential to protect the family from the financial crisis as well as to prepare a cash value for the future life. Even if the single policy is still more popular, nowadays there’s also a need for joint life insurance policy. This kind of policy is a good option in situations such as preserving the lifestyle, business transition planning or even in the need of a cash value.
What is Joint Life Insurance?
There are many reasons why people decide to share the policy. However, the most common one is life insurance policies for married couples.
Joint life insurance policies for couples provides cover for two lives and gives you the security of knowing that your loved ones will be taken care of if something should happen to you.
With this kind of policy, there is usually one pay-out that is made when the first policyholder passes away. After the single pay-out, the policy usually comes to an end. In many cases, it is usually cheaper than having two separate policies. This also means that you will only need to deal with one set of paperwork, which will make your life easier.
Why Life Insurance for Married Couples?
Life insurance for newly married couples is the best option for spouses that wish to protect each other or their kids in the event of premature death. It is very popular among the couples as getting this policy usually means lowering the price and protecting your assets. This policy can help you provide the funds to orderly transfer a business interest, especially if it is a family owned businesses. This way the business can stay in the hands of the family.
Life insurance policy can help assist in planning for the financial future, especially if you haven’t been putting your money aside for just in cases. The account cash value that will be built in time can be accessed via a policy loan or withdrawal to help with huge expenses, such as education, retirement supplement, or others like unpaid loans. However, this isn’t the case if you choose term life insurance for couples.
The Pros and Cons of Life Insurance Policies for Married Couples
Many couples decide to buy a joint life policy instead of two single policies because one is usually cheaper than two separate plans. However, it depends on the case. Also, in many situations, it is easier to deal with just one set of paperwork, and it spares you a time and the money. However, not every life insurance is the best option for everybody, therefore keep in mind why you are taking life insurance in the first place.
When you are taking life insurance policy, having kids that depend on you and that may be left behind if something should happen to you or your spouse, could change the way you look at joint policy. When it comes to this policy, the pay-out usually comes only after the first death. Therefore, if you choose life insurance with a one pay-out after the first death, bear in mind that after it the policy will expire. This will most probably leave the other spouse without insurance.
What Happens after Death?
After the first death, a new policy could be arranged for the spouse that has been left behind, there is no arguing with that. However, there is a big chance that the premium will be higher than the previous one because of the age change and poor health condition. Therefore, if you and your partner happen to be a different age and in a different state of health, maybe separate policies can be the better option for you, especially if there are still dependent children or an outstanding debt that may be left behind if something should happen to any of you.
There is also an alternative. You could take a joint life insurance that pays out on the second death. In that case, your policy would be cheaper because the risk of a claim is smaller. However, there is still only one pay-out, just this time it will be after the death of the second spouse. This seems to be the better choice for couples that may leave dependent kids behind.
If Marriage Ends?
While taking joint policy, nobody thinks about what happens to it if marriage comes to an end. Sorting out the policy after divorce can be really confusing and complicated. This can have a great impact on your finances, and that is why it is so important to understand how it works. If it happens that the couple gets divorced, it will be a more difficult situation as the insurer usually cannot divide the cover, and the policy may almost certainly lapse.
To get a joint policy you don’t have to be married to your partner, but it works better that way. Even if there are two partners that bring the money, considering two separate policies is not a bad idea. If your health is poorer and you are older than your partner, maybe it is best to opt for different terms. This way you will get the chance of doubling the payout.
Compare the Price
A joint policy is not as common as individual life insurance, but it is usually cheaper. This way you deal with only one set of papers, which makes life insurance for married couples easier and in many cases even more affordable.
However, to be sure that you got the best deal, get some free online quotes first. Also, make sure that joint policy is the best option in your situation, as in some cases, two single policies may be a better choice.
No matter the policy you are buying, before you actually do it, it is important to understand how it works if you want to enjoy its benefits to the fullest. So before you decide on joint or single life insurance, first try to compare the two of them to make sure you made the right choice.