If you are researching what insurance policy is good for you and your partner, then you must have come across first to die insurance policy. The question is what is it all about and how do you go about it? That’s a good question and we will be answering your questions in this post. Let’s dive in
What Is First To Die life insurance:
The first to die insurance policy is a kind of joint life Insurance Policy purchased by couples to cover the two of them at the same time, and it pays out the death benefits immediately after one policyholder dies. This is very common for young families and couples with low incomes.
Why First To Die Insurance?
As a couple who have dependent children, getting first to die insurance could be the best decision you can take because, with that, all household expenses are taken care of when any of you dies.
Nobody is praying for death, yet death is inevitable and no one knows when it will come, with that in mind, your first thought should be about how to give your family the best future now that you are still alive. That’s where the first to die insurance policy comes in.
With that, you are sure that your family is covered. Having first to die insurance will give you that coverage you need even as you save your money on the monthly premium you pay to the insurance company.
First to die policy will also take away the uncertainties of predicting which of you dies first. It can be impossible for you to get insurance cover for both of you, therefore, you will have to critically think about which of you needs the most death benefits. Meanwhile, if you guess wrong and the lower benefits spouse dies first, you know what that means.
Who Takes First To Die In Insurance Policy?
Like I said earlier, first to die insurance is pretty good for couples who are just beginning life, with their young families. But business partners can also buy this policy. Also, two people who have a financial relationship of any type can take it also.
As husband and wife, it will be imperative for you to quickly go for first to die insurance immediately after you find out that the demise of any of you can cause a great money vacuum for the surviving spouse.
The best time to buy this type of share is when you are young; am talking about when you are most insurable. The policy is also good for couples, especially when one of them is having a health challenge and can’t be insured. But it can be too expensive in this condition.
Setting Up Your Joint Life Insurance Policy
If you are looking to set up your insurance policy with someone else; whether your spouse or business partner, then you must be ready to prove to the insurer about your shred assets with them.
Being able to prove that to the insured is what proves your eligibility. After that your next step is to provide your medical reports to the insurance company: don’t be afraid of either of you has a medical condition that could disqualify the eligibility because there is an option for that.
Joint life insurance is a good option when individual life insurance fails, but you must be ready to pay a high premium for such coverage. As you are ready to apply, you will have the option to choose between first to die insurance policy or second to die insurance policy.
Three Things You Must Consider Before You Buy First To Die Insurance.
There are three most important things to put into consideration in order to get the best first to die insurance policy. They are
- Your Family:- Remember that you are not taking this policy for your personal benefits, but for your family. In that instance, your greatest need will be to choose whatever will be more beneficial to them. Therefore, think of what happens to them when you are gone. Would the death benefits they get after be good for them? Also, consider whether to cover your children also with a policy.
- Exclusions And Eligibility:- As you already know, the insurance company have its criteria for each policy and you must be eligible to be covered. For example, you must be of a certain age to be eligible, health is also part of it, etc. There are other this that can disqualify your eligibility – like, such as a certain health condition, extreme activities, or risky sports.
- Other Features:- All joint policies are not the same. When you compare the features of the other types of joint life insurance, you’ll be able to choose which is better for you. Make sure that for any of the policies you choose, you are getting the best coverage. Ask questions about the rider that best describes what you want in a policy.
About The Death Benefits Of First To Die Insurance Policy.
The benefits with the first die insurance activate immediately after the first policyholder holder dies; from that point, the death benefits from the policy automatically go to the second insured in the policy. If for example, the joint policy is for you and your business partner or for you and your wife, the benefits will go to your partner or wife respectively when you die. That is stated on the first to die policy details
That is totally different from the second to die policy because the latter pays when the two policyholders are dead. In that case, another beneficiary is needed to receive the death benefits.
Advantages Of First To Die Insurance Policy:-
- Opportunities To Decide– Before you buy easy to die insurance policy, you are allowed to compare it and other available policies. This gives you the opportunity to see Insurance experts guide you as you choose what policy is right for you.
- One you must enjoy the benefits- Unlike the second to die joint policy where the benefits are paid only when both Policyholders are dead: one of the insurers will be alive to enjoy the death benefits. That is called”eating the fruit of your labor.
- The premium is cheap and easy to pay– the monthly premium for first to die insurance policy is always cheap, therefore, it is flexible for the rich and low-income earners. Other insurance policies have high annual premiums, so many low-income earners can’t invest in them.
Disadvantages Of First To Dies Policy
- Other levels of coverage may be required:- In first to die policy, the insurer will require different levels of coverage for some couples: maybe one policyholder has a big employer coverage than the other. For example, if one of you needs 500,000 coverage and the other 250,000 coverage the joint policy will be difficult to cover both of you.
- No flexibility– The policy is not flexible, so there is nothing to do when there is a need to re separate.
- The survivor stays without insurance- When there is an unexpected death, the insurance pays the benefits to the survivor and automatically the policy ends. As that happens the survivor is left uninsured. Depending on the age or health, it may not be easy or it will be expensive to get new insurance to cover him or her.
Read this post to learn about the first to die insurance policy and how it is good for you and your partner. In this post, I have explained everything you need to know about insurance policies and which policy is good for you.