First-to-Die Insurance: A Comprehensive Guide for Business Partners & Spouses

First to die insurance is an insurance policy that is taken out on two individuals. This type of insurance is usually taken out on business partners or spouses. First to die insurance is also called joint life insurance. This type of policy is designed to cover the lives of two people at the same time. When one of the individuals dies, the other surviving person receives the death benefit of the life insurance policy.

First to Die Insurance

This is a common type of life insurance for spouses and business partners to purchase. In the case of the married couple, the insurance settlement is designed to help pay for the debts of the couple. For example, the money will generally be used to pay for the remaining balance on the mortgage, credit card debts, auto loan debt and any other type of debts that was incurred. In the case of the business partners, the money can be used to pay off business debts or it can be used to purchase the remaining share of the business from the deceased person's family.

Cost and Underwriting

Typically, one of the main reasons that people are attracted to this type of insurance because it is less expensive than paying for two different policies. If you get an individual life insurance policy for each person in the couple, it will cost you a little bit more. In most cases, the price of a joint life insurance policy will generally only be a little bit more than if you were to purchase an individual life insurance policy. Because of this, it often makes more sense for a couple to purchase joint life insurance.

Another reason that many people opt for joint life insurance is because the underwriting requirements are little bit easier than if you were to try to get an individual life insurance policy. This is especially true if one of the individuals in the policy is very healthy.

Loans

With most of these policies, you can take loans out on the cash value. In order to be able to access loans, you have to purchase some type of whole life insurance. By taking out a loan, you will be able to borrow money at a low interest rates and you will get flexible repayment terms to repay the balance.

Not Widely Available

Even though first to die insurance might sound like a good idea, it may be difficult to find. There are not many insurance companies that offer this type of insurance. Insurance companies know that they can collect more money if they only sell individual life insurance policies. Therefore, you may need to do extensive research in order to find a first to die life insurance policy.