Joint Life Insurance Policies and Premium Waiver

Different Insurance Policy Options Explained

Oct 29, 2009 Fleur Hupston

Life insurance comes with many different options. Two worth considering are joint life insurance and premium waiver coverage.

Joint life insurance is aimed at couples who are married or live together. Simply put, it generally means 'first to die' insurance, meaning that two people are insured but the benefit is paid only once, that is on the death of the first of the two policyholders. There are some other options, however.

Joint Life Insurance Policy Options

Joint life generally comes with three options:

The policy will pay out when the first of the two insured parties dies. The contract then ceases. The premiums for this insurance should be higher than on an insurance policy for one person, but lower than on two separate policies.
The policy will pay out on the last partner dying.
The policy will pay out twice, when both partners die.

Why Take out Joint Life Insurance?

There are a few advantages in taking out joint life coverage as follows:

It can be less expensive than two separate policies,
It is ideal for covering estate duty,
It allows for a surviving spouse to replan and
Joint life provides a calamity plan if, for example, both parents are killed at the same time for example, in an accident.
A popular use of joint term life is for mortgage protection, and can be a complement to a policyholder's retirement plan as it provides a couple purchasing an annuity with more options.
Where there is a small business involved which is owned by the two partners, joint life insurance policies can often be a better and cheaper option.

Joint Term Life Insurance Policies

These are intended to cover relatively short term insurance needs, for example a 10 year policy with the option to renew. These policies are usually guaranteed which means that the premium will not change during the 10 year period.

What is Premium Waiver Coverage

Premium waiver coverage is insurance that can be used for both investment and risk insurance. In most cases premium waiver is used to ensure that premiums will continue to be paid if the policyholder is disabled, unable to work and therefore unable to pay the premiums on the life insurance policy.

Premium waiver can also be used to ensure that premiums will continue to be paid on the death of the premium payer- this is important where the premium payer differs from the life assured.

Contact a qualified broker or financial planner to get the best quotes and/or advice. Before signing the joint insurance application, read through all the small print and details of the contract and ask the planner to explain anything that is not fully understood.

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The copyright of the article Joint Life Insurance Policies and Premium Waiver in Insurance is owned by Fleur Hupston. Permission to republish Joint Life Insurance Policies and Premium Waiver in print or online must be granted by the author in writing.

Joint Life Insurance Premiums can be Higher