A survivorship or joint life policy gives new possibilities for those with joint life insurance policy requirements
Looking at a last to die life insurance policy could be one of your best options.
In life insurance, there are so many options and life insurance types that it can make your head spin…
A joint policy is not a policy you often hear much about but are more common than you would think.
A joint policy will cover two people at the same time. Similar to an auto policy that covers two drivers simultaneously.
There would usually be a price break because of this as well. And covering the second person is often done with what is called a policy Ryder. Read more here about why Life insurance is important.
This type of policy is also known as a ‘Survivor policy’. These policies can be issued as term or whole life policies
Joint Life: First to die life insurance
Joint life insurance is used when there is a need for two or more people to be protected and the need ends when one person dies.
This is an interesting last to die life insurance policy and it must be understood to be sure you would need one.
After the first death, joint life insurance pays out only when the first person dies.
Joint life insurance insures two or more people for less than the sum of two individual policies, and premiums are based on the average age of the two. It is commonly used for spouses and occasionally business partners.
Survivorship Life: Second (or last) to die
Survivorship life is similar to joint life, it insures two or more people for a premium based on their average age. Survivorship life pays a death benefit only on the last death, (unlike joint life which pays a death benefit only on the first one).
Since the benefit sum is paid only when the last insured dies, the life expectancy for the policy is generally longer which allows for a lower premium than a typical individual or joint life policy.
Often, couples who are retired and do not rely on the spouse for income will buy a survivorship policy to assist their children with estate taxes.
These policies sometimes include a spendthrift clause
- The spendthrift prevents the beneficiary from negative effects of poor budgeting and spending the benefits too rapidly.
- The beneficiary is not entitled to change the settlement options and cannot borrow or assign any of the proceeds.
- This clause requires that the benefit amount be paid out over time often using fixed installments.
So there you have it, Last to Die Life Insurance and other policy types , their descriptions. You should probably have a good idea if this type of policy would fit your needs.