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Joint Term Life Insurance Protects Dual-Income Families, Business Partners

By Mike Heuer

In this modern age there are many families in which the husband and wife are dual earners to provide the money needed to pay bills and raise children. A joint term life insurance plan can help them ensure the loss of one of them won’t cripple family finances and create even greater hardships when one spouse dies suddenly.

A joint term life plan, like other term life policies, is based on the ages and general health of the named insured. Normally, there is only one person who is the named insured in a term life insurance plan. But a joint term life plan will have two named. And if one of them dies, a death benefit will be issued and the policy terminated.

Another instance where a joint term life plan can help a great deal is when involved in a business partnership. Business partners can obtain a joint term life insurance plan to ensure the enterprise remains viable and survives the loss of a critical business partner due to a sudden death. As with joint term life plans for married people, the policy would pay a death benefit if one of the insured business partners dies, and then the policy would be finished.

As might be expected, costs for joint term life policies cost a bit more than term life plans for one person. But the rates are not significantly higher, just marginally so. A level term life plan for one person might provide a $500,000 death benefit for as little as $30 per month. The same death benefit on a joint term life plan might run $40 or more per month, which is a slight increase in premium costs but not prohibitively so.

Underwriting methods also are similar for joint term life plans for business partners and spouses. Their ages, basic health information and whether or not they smoke tobacco products will be weighed and compared to mortality tables, which enable insurers to determine the odds of someone dying while life insurance protection is in place. So the younger the spouses of business partners are, the lower the cost will be to maintain the term life policy. Typically, there is not medical exam required to be performed by an insurer-approved doctor, as would be the case with a whole life insurance policy.

There also might be options for coverages, such as decreasing term life plans that have a decreasing death benefit as well as cost as either a home mortgage or business cost is paid down over the years. The lessened need for a death benefit is reflected by the lower cost in proportion to the lower risk to life insurers as the death benefit is reduced over the years.

Some joint term life insurance plans also might have options for guaranteed renewal, in which case the premium will go up but there are no additional requirements for health exams or other factors. But, if one of the people insured by the policy should become terminally ill and the policy expires, that person will be considered uninsurable.