Joint Life Insurance

Once upon a time most families relied on the income from a single breadwinner, and it was important for that breadwinner to have sufficient life insurance coverage in place to protect the rest of the family. These days, however, it is much more common for both the husband the wife to work full time, and that can complicate life insurance needs somewhat.

After all in most two income households both incomes are needed, and the sudden absence of one of those paychecks could have a devastating impact on the family budget. Without that additional income the remaining family members may find it impossible to pay the mortgage, the utility bills and the other expenses that come with running a household. Since both incomes are vital to the lifestyle of the family, it is important to protect both of those incomes with a properly structured life insurance policy.

That is where joint life insurance comes in. Joint life insurance is designed to protect the lives of two people instead of just one, making these policies a great choice for couples. The proceeds of the life insurance policy are payable upon the death of the first person, allowing the surviving spouse to go on in following the death of his or her partner.

Joint life insurance policies have a number of important advantages compared to purchasing two individual life insurance policies. Once of the most significant advantages has to do with the cost of the policy. Purchasing a joint life insurance policy can be quite a bit less costly than purchasing individual life insurance policies for both spouses. The premium savings can be used to build up savings, create a rainy day fund or start a retirement portfolio. The money saved in this manner can be used to augment the benefits of the life insurance policy, providing an additional layer of protection for both spouses and for their dependent children.

Purchasing a joint life insurance policy can also make things a great deal simpler. Instead of trying to determine how much life insurance each spouse will need, based on factors such as current income, family expenditures and the like, the couple can simply purchase a joint life insurance policy that covers both of them.

When purchasing a joint life insurance policy it is typically a good idea to purchase a death benefit equal to between 20 and 30 times the combined annual income of the couple if both are employed. This is the amount of money financial planners recommend, since it allows the surviving spouse to take only a small percentage of the lump sum each year to meet living expenses. With this small draw down schedule the proceeds of the policy should last for decades, providing plenty of protection for the family if one spouse were to die prematurely.

And as with any life insurance decision, it is important to shop around as widely as possible. There are many different life insurance companies out there, all competing for business. By shopping around and comparing policies carefully those couples should be able to purchase adequate life insurance coverage for an affordable monthly premium.