What is Joint Life Insurance?

Couples who want to purchase life insurance together have two options. They can either buy two separate policies or a single joint life insurance policy.

April 1, 2021

Joint life insurance, which some people jokingly call couple life insurance, covers both spouses in exchange for a single premium payment each month.

Continue reading to find out more about a joint life insurance policy and whether it’s right for you.

What is Joint Life Insurance?

Joint life insurance is a life insurance product that’s built for two. It requires only one application and pays out only once. If you are looking for life insurance for couples, joint life insurance policies could be a good choice.

Why? Glad you asked.

A joint life policy usually costs less than two separate policies for two reasons:

In the case of a joint life insurance policy, you and your partner will be covered for the same amount, and the life insurance policy will end once the insurer pays the death benefit to your beneficiaries.

Joint life insurance policies are usually permanent. That is, the life insurance policy stays in force until one or both of you pass away, depending on its terms. Depending on how your permanent joint policy is structured, it may include a savings component. The money in this savings account, called cash value, grows on a tax-deferred basis. You can borrow against or withdraw from your cash value any time and use the money as you see fit.

Joint term life insurance, by contrast, provides coverage only for a specific period and doesn’t build cash value. For these reasons, it is considerably cheaper than joint permanent life insurance.  

Types of Joint Life Insurance

Joint life insurance is of three types: joint first-to-die, joint last-to-die, and combined.

Joint First-To-Die Life Insurance

Happy couple walking on a bridge.

A first-to-die policy pays the entire death benefit when the first of the two insured persons die.

Joint first-to-die can be used to pay off a mortgage or any other type of debt. It relieves the burden of debt payments for the survivor, especially if he or she doesn’t earn a paycheck. Such a life insurance policy can also be used for income replacement, particularly when both spouses have similar incomes.

A joint first-to-die policy can prove critical in a business setting as well. You and your business partner can use it to fund a buy-sell agreement. It can also help ensure that your business doesn’t face financial hardships if either of you were to pass away prematurely.

First-to-die is similar to a single life insurance policy. Once the insurer pays the benefit, the coverage terminates. If the survivor still wants coverage, he or she will have to apply once again.

Joint Last-To-Die Life Insurance

Joint last-to-die life insurance pays the death benefit after the last insured dies. It is also known as survivorship life insurance or last-to-die life insurance. After the death of the first insured, the surviving partner will have to continue paying premiums to maintain coverage.

The surviving spouse doesn’t receive any financial benefit in the case of joint last-to-die insurance. For this reason, it isn’t a suitable option for debt repayment or income replacement. Most people buy these policies to leave a legacy for their children.

Combined Life Insurance

Old couple watching the sunset.

Combined life insurance works pretty much the same way as two single-person policies. That is, both you and your spouse will get coverage, and the insurer will pay the death benefit twice.

So what’s the benefit of taking combined life insurance?

Well, combining yours and your spouse’s policy into one can help you save money. Insurers offer a pretty good discount (3-5%) when you combine two policies into one.

The Positives and Negatives of Joint Life Insurance

Positives of Joint Life Insurance

Joint life insurance policies are often cheaper than buying two separate life insurance policies. It could make sense for young couples on a tight budget. Another benefit is that it pays a death benefit regardless of which partner dies.

Negatives of Joint Life Insurance

The biggest drawback of joint life insurance is that it pays out only once. While buying two separate policies increases the cost, it also means double the coverage since each policy will pay a death benefit separately.

Also, in the event of a divorce, you may be forced to cancel the policy. If several years have elapsed since you bought the policy, you may have to pay a higher premium on account of your age.

The surviving partner of a first-to-die life policy faces a similar problem. The policy ends at the death of the first insured, and if the surviving spouse wants coverage, they will have to take another policy. Since life insurance costs increase as we age, that’s likely to come at a higher rate.

Can you get joint life insurance if you are not married?

You can still get joint life insurance if you are not married! Joint life insurance typically pays out to a surviving spouse or partner when both joint policyholders die. This is important because, in the event of an unexpected death, this joint plan provides some financial protection for your loved ones and children.

However, there may be certain limitations on coverage if you are not legally married. Some of these limitations include limited joint life insurance benefits, less coverage for your children's education, and funeral costs. Make sure you know the details of joint life insurance if you are not married by checking with Canada Life or speaking to a financial advisor.

What happens to a joint life policy after divorce?

It's important to discuss joint life insurance with your partner if you're not married. If you get divorced, joint life policyholders are often entitled to a payout at the time of death, but this may depend on where in Canada they live and whether there is an agreement between them that specifies how joint assets should be divided.

For example, someone who has children from a previous marriage might want their ex-spouse to receive some or all of the joint policy for the benefit of those kids when he/she dies.

It can also depend upon what type of joint plan it is – some plans allow beneficiaries other than spouses while others do not. Speak with Legal Aid or with a financial advisor about any specific questions regarding divorce and joint life policies.

Why Would You Want Joint Life Insurance?

happy couple walking in a forest.

Joint life insurance policies could make sense for:

What Happens to a Joint Policy After Divorce?

What happens to your joint life policy when you and your partner call it quits?

Here’re your options:

  1. Maintain the joint policy together

You and your spouse can opt to maintain the joint policy together after a divorce. For that to happen, however, you two will have to agree to the terms of managing premium payments. This can be unwelcome stress in an already stressful situation.

  1. One person maintains the policy

You or your ex can take over the joint policy. This might make financial sense if the policy was bought several years back and you’d have to pay higher premiums now because you’re older.

  1. Cancel the policy

Alternatively, if you have whole life insurance, you can cancel the joint policy for its surrender cash value. The amount will be equivalent to the cash value of your policy minus any fees and penalties.

  1. Divide the joint policy into two separate policies

Some insurers offer a separation benefit that allows you to divide a joint policy into two individual policies. Usually, this option is available only when you are under a certain age and apply within a specific period (generally 90 days) after your divorce.


Joint life insurance policies cover two people and is usually cheaper than buying two individual policies. However, the tradeoff is that it pays the death benefit only once. It could make sense for couples on a tight budget. For others, we recommend that both partners buy a single life insurance policy.

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