What is Spousal Discount in Life Insurance?
<lingo>When purchasing life insurance, both people within a marriage should carry a policy if they are contributing members to the family’s finances (or provide for valuable services during the lifetime). In some situations, it is possible to secure a spousal discount, or a lower price, on a policy if the individual is added to the existing policy of his or her spouse. There are several ways for married couples to secure the financial security they need when it comes to life insurance. Spousal discounts may apply in some cases.</lingo>
Spousal Discount Clearly and Briefly Explained
Spousal discounts may be available for married couples purchasing either whole life or term life insurance. It is possible to purchase a joint life insurance policy in most cases, and this provides the best level of cost. However, there are several forms from which an individual can choose.
<twitter>When purchasing life insurance, both people within a marriage should carry a policy if they are contributing members to the family’s finances. In some situations, it is possible to secure a spousal discount, or a lower price.</twitter>
In a first to die life insurance policy, the life insurance policy pays out the death benefit at the time of the death of the first spouse. In this type of joint life insurance plan, the surviving spouse receives the funds (if he or she is listed as a beneficiary) and the policy then ends. It does not go on to cover the second spouse. This option could be beneficial because it can allow the surviving spouse to make his or her necessary financial commitments, potentially paying off a mortgage to cover the costs or debts of the couple.
Another option is a second-to-die life insurance policy. This type of policy is often called survivorship life insurance. It only pays out when both spouses die, and the policy remains in place throughout both of their lifetimes. This option is generally ideal for those who wish to use life insurance to cover estate planning or to leave funds behind for their heirs. The funds from this type of policy can be used by the beneficiary for any need. They can help to pay for the costs of settling the estate or be used in any way associated with their needs. In some cases, it can also pay for inheritance taxes.
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