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Business partners, devoted companions and marries couples all have an obligation to protect their joint assets. Many individuals choose to purchase separate life insurance policies for each party, which means two separate premiums. What they often don’t realize is that purchasing one joint term life insurance policy can protect all parties for the cost of one premium. The policy will pay out when the first individual dies.
Variable Terms Before discussing the particular benefits of a joint term life policy, it is helpful to understand more about this type of insurance. Most insurers offer 5 to 10-year, 10 to 20-year and 20 to 30-year terms. Unlike whole life policies which can be used as an investment, the funds of a term life insurance may be forfeited if no claims have been submitted when the term expires. Renewal Options Most insurers offer an option to renew your policy when the term expires if you have not submitted any prior claims. Basically, the term policy is converted into a whole life policy, and your premiums and benefits may or may not increase. Make sure to read through all of the terms and conditions listed in your joint term life insurance policy before you sign the document. Benefit to New Homeowners If you decide to assume a large debt for purchasing a home with another individual, you want to avoid having to pay the outstanding balance if this person dies before the loan has been completely paid. It doesn’t matter whether you have made a large purchase with a friend, relative or colleague—choosing a joint term life insurance policy will protect each other if one party dies unexpectedly. Benefit to Families Joint term life insurance can also benefit new parents who may be struggling financially and who are concerned about protecting the future of their children. A single policy protects both parents for the same benefit, but it will only pay out when one of the parents dies. Regardless of who is the sole income earner of the household, your children will be financially protected if either you or your spouse dies prematurely. The cost of purchasing a joint term life insurance policy to protect two providers is only slightly higher than the cost of purchasing a policy for one individual. Therefore, you can save anywhere from several dollars to several hundred dollars every month on your premiums. However, you do need to remember that the surviving parent will no longer be covered by your insurance policy if one parent dies. Benefit to Business Partners You may decide to go into business with another individual, but you will assume greater risk since you will be responsible for your own investment as well as that of your partner. A joint term life insurance policy can ensure your business will be financially protected and your assets properly managed after you die. It will also protect you from having to assume all of the company debt if your partner dies unexpectedly. Joint term life insurance can include benefits for all or merely a portion of the total business investment. Certain insurance companies will even cover more than two business partners, although the insurance policy will only pay out one time. If your business includes multiple partners, you may want to purchase multiple policies. Whether you’re a business partner, parent or new homeowner, purchasing a joint term life insurance policy can offer you the protection you need at an affordable price. Be sure to talk to an insurance agent about the terms and renewal options that suit your particular needs. You can often money by covering more than one individual with one insurance policy and one premium payment. |
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