Joint First-to-Die Life Insurance: Protecting Against the Loss of an Income Earner

While Joint Last-to-Die (Survivorship) insurance is common for estate planning, **Joint First-to-Die** insurance is a policy that covers two individuals (usually a married or business couple) but pays out the full death benefit upon the **first person’s death**.

Primary Uses of First-to-Die Policies

This policy is designed to provide immediate financial relief and liquidity upon the loss of the primary income earner:

• **Income Replacement:** Provides funds to the surviving spouse to cover living expenses, debt, and child care.
• **Business Buyout:** Used in a business partnership to fund a buy-sell agreement, ensuring the surviving partner has cash to purchase the deceased partner’s share immediately.
• **Mortgage Protection:** The death benefit can be used to pay off a shared mortgage or major debt.

Cost Efficiency

The premium for a Joint First-to-Die policy is typically **lower** than the cost of two separate permanent policies because the insurer only has to pay one claim. However, once the first benefit is paid, the policy terminates.

Disclaimer: This content is for informational purposes only and is not financial or legal advice. Since the policy terminates after the first death, the survivor loses the coverage and must buy a new policy, likely at a higher rate.