Joint term life insurance is most suited to spread risks


Joint term life insurance is usually taken by a couple who want to spread their risks. It appeals most to those couples who want their insurance to cover their mortgages should anything happen to either one of them. It is particularly suited for the following buyers:

1. New homebuyers: Mortgage protection is the single most popular use for a joint term life insurance. Typically, a couple buys a house with each contributing towards its monthly installment. If anything untoward happens because of which either of the partner dies, then the deceased's coverage makes sure that the survivor is not left stranded.

2. New parents: New parents should, and do, take joint term policies. This helps them keep the future covered. Should anything happen to one, there is still the coverage to make up for the lost income and take care of expenses such as child care and tuitions.

3. Retirees: Joint term insurance is a great way to plump one's retirement option. It gives those who are purchasing an annuity, more options. Typically couples purchase something that gives them a monthly payout on either of the following: until the first partner dies (a single life annuity), or until the surviving partner dies (a last-to-die annuity).

Couples obviously choose the latter because it gives the surviving partner a regular monthly income. However, because the company is giving you benefits on the annuity amount for a long time, the monthly payout is less. Here, buying a life insurance policy on a first-to-die basis, means you can purchase a single life annuity, get higher monthly payments and when you die the life insurance policy is paid out to your partner. In your lifetime you gain. In your absence your partner does.

Now let us take a look at what term periods are available for a joint term life insurance policy. These policies are really for short term needs, so you can buy them in 10 and 20 year period time frames. If you think you need a policy for about 13 to 14 years, what you can do is take one for 10 years and then renew it every year. You can even renew it for the next ten years at one go.

The renewal premium is always higher, but on the flip side you do not have to go through another set of medical tests and can renew the insurance up to the age of 85. This coverage is best suited for those who have their debts and mortgages well under control but do not want to take a chance.

The 20 year policy is available on similar terms and is better for people who are starting out early and therefore have a longer future ahead.


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