Life insurance is an important source of support because it can help couples face the future with more confidence. Even though nothing can prepare you for the emotional loss of a spouse or partner, life insurance can help prepare you for the financial loss. But there are different types of life insurance. Most couples opt for separate individual policies, but they can also buy joint life insurance. It can be an option for some people, but is it right for you? This article can help you decide by telling you about:

How much life insurance do you need?

One of the best ways to start learning about your life insurance options is by estimating how much you may want to have and how much it costs. This calculator will provide that information in about a minute, with no obligation.

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The cost shown is for a 20-year term life insurance policy for an individual of your age in good health. The recommended amount is based on the "Human Life Value" approach1, a way of looking at life insurance needs based on your current annual salary plus what you expect to earn in the future. You may want more or less coverage, and there are other ways to calculate your need. After learning more about your options, you may decide you want another kind of policy (such as a joint life policy). Having said that, 20-year term life insurance is one of the most popular and affordable coverages available, so it can be helpful to use that as a baseline. 

Individual and joint life policies: what they are and how they work

There's a significant (and obvious) difference between these two types of policies. An individual life insurance policy covers a single person, but joint life insurance covers two people – and only two. However, it only pays a death benefit when one of those people dies (more on that below). 

Individual life insurance: choose from term or permanent protection

Term life insurance provides financial protection for a specific period of time, typically between 10 and 30 years. Term policies are sometimes called "pure life insurance" because their only purpose is to pay a death benefit if the policyholder passes away during the term. There's no cash value or asset-building component to the policy – once the term is over, there's nothing left.

Permanent life insurance typically costs more than term life insurance but provides financial protection that can last your entire life, as long as you pay the premiums.2 Unlike term, it includes an wealth-building component – the policy's cash value – which helps make the policy last indefinitely while providing other financial benefits.3 A portion of your premium dollars are invested, and your cash value grows tax-deferred over time – but the entire death benefit is immediately payable from the first day you have the policy.4 There are two main types of permanent life: whole life and universal life. Whole life insurance is more straightforward – the premium remains the same for life, the payout is guaranteed, and the cash value grows at a guaranteed rate. Universal life insurance can be less expensive, but the premiums, payout, and cash value growth rate can vary, making the policy more complex. 5

Joint life insurance: Most policies are permanent

Joint life policies are niche financial products. Not every life insurance company offers them, so you may have to look around. Even among insurers that offer joint life policies, you may not find both term and permanent life insurance options. In fact, few companies offer term joint life for the simple reason that most of the couples buying it don't want temporary protection: if the policy term ends before one spouse or partner dies, there's no payout.

There are two ways to structure a joint life policy

Joint life insurance covers two individuals who will likely die at two different times. However, the policy only pays a single benefit. The logical next question is, "When is it paid – after the first death or the second death?" That's why insurance companies offer two kinds of joint life protection. 

First-to-die life insurance

With this option, the payout is made after the first person dies. It is often purchased by younger families to replace each other's earnings, with the surviving spouse named as the beneficiary. So, for example, in a household where both partners earn similar amounts, a first-to-die policy can help the survivor support their family, pay bills, and maintain their lifestyle. However, once the policy pays out, there is no remaining protection for the second person. If the survivor wants to continue to be insured – for example, to provide financial support for the couple's children or even final expenses – he or she will have to apply for a new policy at rates that will likely be higher.

Second-to-die life insurance

This option is sometimes called survivorship life insurance, and the payout is made only after the second (surviving) person passes away. So, it can't provide income replacement for the surviving partner – instead, the payout goes to the couple's beneficiaries. Why get this type of policy? It's typically purchased for estate planning and can help alleviate the time and uncertainties of probate (the legal process for validating a will) while also providing: 

  • Liquidity to pay estate and inheritance taxes
  • Assets to generate funds for other surviving dependents
  • Estate equalization among heirs
  • Funding for special needs children

It's important to note that the beneficiaries of a second-to-die policy don't have to be the couple's children or relatives. This type of policy can also be used to simplify the transfer of assets to a non-relative, such as a friend or business associate. For that matter, the beneficiary doesn't even have to be a person – the payout can be used to leave a legacy for a favorite charity or religious organization or as funding for a family trust.

Reasons to consider a joint life insurance policy

These policies are rare for a reason: compared to individual policies, they tend to offer more disadvantages than advantages. So, you should have a clear reason for getting it, and before you buy joint life, consider exploring other permanent and term life options. With that in mind, here are some good reasons to consider a joint life insurance product – followed by reasons not to.

One policy may be less expensive than buying two separate policies

The most popular reason for buying a joint life policy may be to get a single lower premium. Generally speaking, it costs more to buy two individual $1,000,000 policies than to get one joint life policy for $1,000,000, for obvious reasons: With two individual policies, insurance companies have a potential payout of $2,000,000, but with one policy for two individuals, the total payout is only half as large.

It can provide more affordable protection for young, dual-income families

Many young families only buy individual life insurance for the working spouse or partner because if that person dies, they need to replace the income they would have otherwise provided. However, when each person earns approximately the same amount, they are equally dependent on each other's income. If either were to pass away, the other would need the same amount to maintain the family's standard of living. In this case, a single first-to-die life insurance policy may well be more affordable than two individual policies with the same amount of protection. It may even make sense to get a term first-to-die product in this situation – if you can find it.

However, second-to-die coverage to provide for a special needs child or other estate planning situations should always be purchased as a permanent (whole life or universal life) joint life policy. The reason is simple: if the policy term ends before the second covered person dies, no assets will pass on to the beneficiaries.

It enables the surviving spouse to have more control over estate planning

Couples often use life insurance to leave a legacy to loved ones or a charitable cause. A second-to-die life policy lets them delay the transfer of assets until both people have passed away. This can allow the surviving person to tap into the policy's cash value if needed or alter beneficiary designations if circumstances change.6 

Reasons not to consider a joint life policy

Each partner has sufficient coverage coming into the relationship

One of the most basic truisms of life insurance is that the cost goes up with age. If each of you has a long-term or permanent policy in place with a sufficient amount of protection, you probably don't want to let those policies lapse. Consider naming each other as beneficiaries on your existing policies instead. The cost of replacing those policies with a single joint life policy may not be worth it: as older applicants, your rates will almost certainly be higher.

You choose to keep your estates separate

When older, more financially established people with children get remarried after a divorce, each partner may already have sufficient income or assets to take care of their own needs if one or the other passes away. In any case, each partner may prefer to name their children (or other family members) as beneficiaries.

The survivor may have to purchase additional insurance at a higher price

If a first-to-die policyholder passes away a decade after the policy was issued, the other gets a payout – but no longer has life insurance protection. At that point, the surviving person will be ten years older and possibly in worse health – and when he or she gets quotes for new life insurance, the premiums may be significantly higher. If both partners feel they need long-term protection, a joint policy may not suffice.

If one partner has health issues, it can cost more than individual coverage

Joint life is actually a group insurance policy issued for the smallest possible group of people – two individuals. Group life insurance costs are calculated based on the average health status and life expectancy of the group as a whole. If one person is significantly less healthy than the other, premium costs will be higher. Similarly, if there is a significant age disparity or one person has a family history of a serious medical condition - or is a smoker - policy costs for your "group" will go up. 

It's time to take the next step

Is a joint life policy a fit for you and your new spouse or partner? Would you each be better off with individual policies? One way to start is by looking at some individual coverage alternatives, for example, by trying the Guardian term life calculator or a similar online tool from another life insurance company. If you and your new spouse or partner still believe joint life is your best option, we suggest talking to a knowledgeable financial professional who can answer detailed questions about policy obligations and guide you to the right type of coverage. If you don't have someone to discuss insurance with, Guardian can help you find a nearby financial representative who will take the time to learn about your situation and present you and your partner with options that fit both your needs.

Frequently asked questions about joint life insurance

Can you get life insurance as a couple?

Yes. Joint life (sometimes called "couples life insurance") is coverage for two people – typically spouses or domestic partners – but the insurance company only pays a benefit when one of them dies. Some are term life insurance policies, but most are permanent whole life or universal life insurance.

How much life insurance should a married couple have?

Married couples with children (and unmarried couples) are often provided guidance to have at least enough life insurance to cover living expenses and financial obligations for the surviving partner and children until the youngest reaches adulthood. One simple way to determine how much coverage you need – and what it may cost – is by using Guardian's term life insurance calculator. You can also estimate your need using one of the popular rules of thumb, such as "Multiply your earnings by 10," or the DIME method that totals your Debts, Income over time, Mortgage obligations, and Education (college) expenses for your children. 

Is it better to get joint or single life insurance?

If both members of a couple need the same level of coverage, it is typically less expensive to buy a single joint policy with a given face value (benefit amount) compared to two individual policies with the same face amount.  Joint life insurance can be a fit for certain people, such as a young, dual-salary couple or older, affluent couples with complex estate planning needs. However, it also has limitations, so it may not be a fit for married couples.

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This article is for informational purposes only. Guardian may not offer all products discussed. Please consult with a financial professional to understand what life insurance products are available for sale.

1 The HLV Theory states that one should maintain life insurance equal to the present value of their expected future earnings. Life insurance companies place limits on life insurance available to consumers based upon this formula and have created age-based multiples of current income as a guideline. For example, a person in their 30s may be insured for around 30 times their annual income, 20 times for a person in their 40s, and 10 times for people in their 50s. Age 60 and over about 1 times net worth.

2 All whole life insurance policy guarantees are subject to the timely payment of all required premiums and the claims paying ability of the issuing insurance company. Policy loans and withdrawals affect the guarantees by reducing the policy’s death benefit and cash values.

3 Some whole life polices do not have cash values in the first two years of the policy and don’t pay a dividend until the policy’s

third year. Talk to your financial representative and refer to your individual whole life policy illustration for more information.

4 Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.

5 Permanent life insurance consists of two types: whole life and universal life. Cash value grows in a participating whole life policy through dividends, which are declared annually by the company's board of directors and are not guaranteed. Cash value grows in a universal life policy through credited interest and decreased insurance costs. The cash value of both policy types benefits when the policyholder pays an amount above the required premium. Universal Life Insurance may lapse prematurely due to inadequate funding (low or no premium), increase in cost of insurance rates as the insured grows older, and a low interest crediting rate. This does not apply to universal life policies which have a secondary guarantee, but if the secondary guarantee requirements are not met the policy will most likely lapse.

6 Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable withdrawal may also be subject to a 10% federal tax penalty.


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