Differences Between First To Die Life Insurance and Second To Die Life Insurance Policy

There are so many different types of insurance available. First to die life insurance and second to die life insurance plans that help loved ones left behind with expenses and such. When trying to determine what life insurance policy that you need to ensure that all your expenses are covered plus leaving extra for your spouse or children you will have to consider many factors. The age of the insured, income level and amount of money needed to help the spouse or children make it through the transition without hardship are things that the insurance agent will ask and use to help find the best policy.

First To Die Life Insurance

First to die life insurance is also known as joint life insurance. This life insurance policy is basically what it states. Spouses purchase a joint policy and then the policy will pay out when one of them passes first. This type of policy only pays out once and only after the first person dies. Sometimes the first to die policies will cost the same or be more expensive as two different policies. The basis behind having joint life insurance is to have a safety net for the remaining spouse. The amount of the policy will be an amount that will pay all expenses plus enable the spouse to have enough extra to live on while they adjust and grieve.

The Disadvantages of First To Die Policies

The downside of a first to die life insurance policy is that the policy must be for the same amount for both parties. This means that you cannot have a policy for $150,000 for one person but then have a policy for $50,000 for the other person. The value of the policy must be the same. Many times people do not qualify for a joint policy since the two parties are not necessarily equal in the amount of coverage they can get. One party may be eligible for a human life value, or what you are worth for the remainder of your life, should you have lived and continued working until age 65. The other party may not be eligible for the same value and therefore they would not be able to have a first to die insurance policy unless it was for the lesser amount.

Second To Die Life Insurance

Second to die life insurance is the opposite of first to die. This type of life insurance is also known as survivorship life. The death benefits are only paid once and only when the second person is deceased. The beneficiaries of the policy will then be given the amount of the policy. The policy amount is based on the combined age of those covered by the policy. Second to die life insurance policies are usually more affordable. The purpose of having a second to die life insurance policy is to ensure that the beneficiaries are able to cover expenses and still have some extra money to take care of unexpected costs. Second to die life insurance policies are not very popular and many people have found that having individual life insurance plans is the better way to ensure that loved ones are taken care of.

The first to die life insurance and second to die life insurance policies are still viable options and will in most cases add to your insurance portfolio. However, there are still many other people who are not eligible or it just does not work for. Those people should consider separate life insurance policies to ensure that the maximum benefits are covered and received for the survivors of the deceased.

Filed in: Life Insurance

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