First-to-die insurance: do you need it? | finder.com

First-to-die insurance

We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But we may receive compensation when you click links on our site. Learn more about how we make money from our partners.

First-to-die insurance benefits

Your life can change in an instant when you lose someone close to you. The death of a spouse or a partner comes with more than grief, but also decisions about your finances. First-to-die insurance helps with the financial struggle by providing money to keep your expenses paid, while you piece your life together.

Paid in either a lump sum or monthly payments, money can be used to cover educational costs, mortgages and other debts. Business partners even take out first-to-die insurance to keep a business from failing.

With all of the trusted insurers that offer life insurance policies, know your options and coverage you need. If you have a partner or a family, a first-to-die insurance policy may be what you need.

What is first-to-die insurance?

First-to-die or joint insurance policies protect both you and your partner under a single policy. It secures your finances, paying out money to cover expenses following the death of a policyholder.

But how is it different than single life insurance?

The biggest difference is that it tends to be less expensive to take out one policy rather than two. However, once the insurance payout is made, the policy ends — leaving the living partner with no life insurance for heirs. For those with health issues or the elderly, finding a new and affordable policy can be hard.

First-to-die insurance is for partners looking for a simple and affordable life insurance policy that will offer financial security.

How much first-to-die insurance do I need?

When it comes to insurance, finding the Goldilocks “just right” option is personal. Opting for too little coverage can find you in a tight spot and not enough money to cover your bills. Too much coverage may cost you more than you can afford — and be more than you need.

Take a look at your current situation and consider the following:

  • Your income. Do both partners work? Do you rely on one income more than the other? Look at your lifestyle and what you would need to maintain it if one of you couldn’t work.
  • Debts. Perhaps you have a mortgage or personal loans to pay off. Factor in any debt or financial commitment that could leave your family burdened.
  • Your partner and children. If your partner is a stay-at-home parent with children who are still attending school, it’s likely they would have to get a job and pay for child card following your death. The cost of keeping the house and raising children adds up quickly when you factor in childcare and housekeeping.

Though not a pleasant discussion, it’s important to have a plan in place that covers your family’s needs if one of you were to die. First-to-die insurance protects your loved ones from financial difficulty, during an emotionally trying time.

Back to top

Who needs joint life insurance?

Most joint life insurance policies are sold to married couples with a family. Though, policies can be for couples who have built a life together, or business partners. It’s always best to shop for joint life insurance plans when you are young and healthy. Applying while you aren’t suffering from health issues, or getting on in age will likely give you more options and more affordable prices.

Most insurers offer joint life insurance, sometimes listed as companion life insurance, couples insurance as well as first-to-die insurance.

Back to top

Things to consider when choosing a first-to-die insurance

A big mistake people make when determining coverage is only covering the cost of a lost salary. Consider the ways your life will change without your partner. Will you need to find childcare, take care of the farm or fix car problems? You’ll be surprised to find that you may need more coverage than just your salary.

With that in mind, here are some other things to consider when choosing a first-to-die insurance:

  • Policy features. Compare more than the cheapest premiums. Instead Iook at your family’s lifestyle and financial expenses to find a first-to-die insurance plan that matches your needs.
  • Exclusions. Perhaps you are an extreme sports lover or have a pre-existing medical condition. Whatever the case, it’s important that you’re aware of your policy’s exclusions so you’re covered. Avoid the frustration of paying for a life insurance plan and finding that you’re not covered when you really need it. Speak to an adviser and read the fine print before committing.
  • Eligibility. Some policies have eligibility requirements based on your age, health or residential status. Generally, first-to-die insurances will be available to residents who are between the ages of 17 and 69, with renewal options until a person reaches an older age.
  • Renewals. Does your first-to-die insurance offer the option of renewals? Are there any requirements that you have to meet to be able to renew your first-to-die insurance policy, such as a minimum time period commitment?
  • Children. Some first-to-die insurance policies will offer the option of adding on your child to your policy for added peace of mind. This may be a convenient way to protect your whole family. Consult your joint insurance adviser.
Back to top

Apply for first-to-die insurance

No one expects to get sick, seriously injured or pass away suddenly, but the reality is that it can happen to any of us at any time. While the uncertainties of life shouldn’t slow us down, it’s best to be prepared for all situations. Finding a joint life insurance plan can alleviate stress and financial hardships so your family will always be taken care of.

Back to top

Adrienne Fuller

Adrienne Fuller leads the publishing team at finder.com. She has one goal: to deliver the accurate and transparent information she wishes she had when she made some of life's important financial decisions. When she's not helping folks save money, she's hiking with her two Catahoulas around her home in San Diego.

Was this content helpful to you? No  Yes

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Privacy and Cookies Policy and Terms of Use.
Go to site