Joint First-to-Die Life Insurance

Monkey Business
Joint first-to-die policies
don’t show the same savings
as two individual
life insurance policies.

Joint first-to-die life insurance policies cover both individuals (almost exclusively spouses) under one policy, while individual life insurance policies create two individual plans for each insured.

Some companies offer multi-life policies, which are essentially individual policies, but under one plan. Unlike joint first-to-die policies, multi-life policies stipulate that if one spouse dies, the other spouse can continue the coverage at the initial policy premiums.

Joint first-to-die policies also offer cost savings to the insured, but they come with limitations. In the event that the insured passes away on a joint first-to-die policy, the second spouse could be left with no life insurance coverage.

Some insurance companies allow the surviving spouse to convert to a new individual policy, but the rates would be based on their age at conversion, whereas if two individual policies were owned, the surviving spouse could keep the coverage at the initial premiums.

Joint first-to-die policies are available in 10-year terms, 20-year terms, 30-year terms, or even Term 100 type plans. The longer the term, the higher the initial premium.

The following is a comparison of the potential cost savings on the joint first-to-die policy versus two individual plans for a 45-year-old, male non-smoker and a 45-year-old, female non-smoker applying for $250,000 of coverage.

Individual plans:

$250,000 for a 45-year-old, male non-smoker with Canada Life is $325 a year.

$250,000 for a 45-year-old, female non-smoker with Canada Life is $240 a year.

$250,000 of joint first-to-die Term 10 with Canada Life, for the same individuals, is $513.50 a year — a savings of $51.50 a year, or just over 9 per cent.

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