What Are the Disadvantages of a Joint Life Insurance Policy?

 


What Are the Disadvantages of a Joint Life Insurance Policy?

While joint life insurance can offer benefits in certain cases, it comes with complications and downsides that lead some financial experts to recommend avoiding it. 

“It is, in my opinion, that each person should apply for their own individual policy so none of the pitfalls of a joint policy are realized,” says Buenger. One of the biggest disadvantages to a joint policy is losing coverage after the first person dies. “If you can’t keep the policy and the carrier doesn’t offer a conversion option, you may have difficulty purchasing a new policy, especially if you had a change of health over the years,” says Buenger. 

Divorce can also complicate matters. If married couples end up divorcing or separating, the other spouse would need to apply for a new policy and prove their insurability before a new contract would be approved and issued. “Divorce can also create a separate set of problems if one of the insured does not want to sign-off on the other spouse obtaining their own contract,” Buenger says.

In addition, joint life insurance policies are getting harder and harder to find. And with premiums for term life insurance coming down, joint life insurance may not be as cost effective as it used to be, according to Buenger. 

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