Getting a life insurance policy is a way that you can safeguard the future of your family after your death. However, it is important for you to get the right life insurance policy that will cater for all your needs. There are two modes of life insurance policies that you should consider especially when you have a family. This is joint life policies or dual life policies.
Joint life policies
Joint life policies usually cover two people’s lives. This life insurance is more affordable to couples as it is cheaper than taking two separate life policies. A joint life policy is paid out after the first spouse dies.
This is why you will find that when it comes to life insurance policies, most couples take one joint life policy. The reason is that it is cheaper and has less paperwork.
However, a joint policy has its shortcomings.
- Most joint life policies usually cover the death of the first person. This leaves the other spouse without insurance cover. Also, when the remaining spouse dies, there will be no money left for the remaining dependents.
- If the relationship breaks down in the middle of the policy, you will still have to continue with the joint policy or the policy would expire since insurance providers will not be able to divide the policy into two separate policies.
- Also, you will find that since this kind of policy is on a first death basis, you might want to take another cover after your spouse dies. This will be very costly as insurance premiums increase as you get older.
- You will also find that the insurance policy will cease to exist if you or your spouse fail to pay their share of the premiums. This mostly happens in case the relationship does not work out.
- A joint life insurance policy does not always cater for the needs of both parties. It does not consider each of the individual needs of the couple and the sum insured is not usually enough at most times since it is paid after the death of the first person.
Dual life policies
This is where you and your spouse each take your separate life insurance covers. It is relatively more expensive than the joint life policy as you will need to have two separate policies for each spouse.
This has various benefits over the joint policy
- It ensures that there is a double pay in the event death occurs. The first to die will have their policy paid, and when the second spouse dies, your dependents will also be left with your policy to assist them.
- Also, if you have two separate jobs, it is easier to have dual life policies than have a joint life policy. This is because joint policies work better in a setup that has one person as the provider.
- You can take a dual life policy with your wife that will suit your individual needs. You will also be able to take a policy that you can afford and for the period that you find applicable to you. Having dual life policies makes it easier for you and your spouse to customize it according to your different needs and address issues such as age and different health conditions.
- You will also find that in case your relationship does not work out; the policy will remain. This is better compared to the joint policy that expires in the case of a divorce.
At the end of everything, you should carefully think about the kind of life insurance policy that is the most convenient for both you and your spouse.
You should also consider your financial needs and pick an affordable life insurance policy.
Whether you choose to have a joint policy or dual life policies, you should ensure that you have your policy written to trust. The essence of doing this is that it will ensure the payment is not delayed. It will also ensure that the payment is not liable to tax as it will be paid to your nominated secretary and not to your estate.
Once you take a life policy, you will have ensured that you take care of your family even when you and your spouse have died.