First-to-die life insurance insures two people but only pays a benefit when the first policyholder dies.
Updated Aug 5, 2024 Written by Robin Hartill, CFP® Robin Hartill, CFP®
Writer | Personal finance, life insurance, budgeting
Robin Hartill, CFP®, is a freelance writer who covers life, pet and homeowners insurance for NerdWallet. She holds a bachelor's degree in English from the University of Florida. With more than 15 years of writing and editing experience, Robin enjoys breaking down complex financial topics for readers to help them make smart decisions about money. She is based in St. Petersburg, Florida.
Reviewed by Tony Steuer Life insurance expert Tony Steuer
Life insurance expert | Life Insurance
Tony Steuer is a financial wellness advocate, podcaster and speaker, and the author of "Questions and Answers on Life Insurance." His advice has been featured in media outlets including The New York Times, The Washington Post, Fast Company, Forbes and CNBC. He has a bachelor of science degree in finance from California State University and holds the following designations: Chartered Life Underwriter (CLU), Life and Disability Insurance Analyst (LA) and Certified Personal and Family Finance Educator (CPFFE).
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First-to-die life insurance is a life insurance policy that insures two people’s lives, but it only pays a benefit after the first policyholder dies.
It’s one of two types of joint life insurance, which covers two lives under a single policy. The other form of joint life insurance is called second-to-die life insurance, and it only pays a death benefit after both policyholders have died.
First-to-die life insurance is a relatively rare type of life insurance . It’s sometimes used by married couples when both spouses work and want to provide income replacement for the surviving spouse. For example, a first-to-die policy could help a surviving spouse pay off their mortgage or fund education expenses for children if the first spouse dies during their earning years.
Business partners sometimes purchase first-to-die life insurance, as well. Upon the death of the first partner, the surviving partner will use the life insurance payout to help with business expenses or purchase the deceased partner’s share of the business from their heirs.
Insurers will consider both applicants’ age and health history in determining whether to issue the policy and how much coverage they’re willing to offer. Buying a single first-to-die policy is usually cheaper than buying two separate comparable policies with the same death benefit because even though two lives are insured, the insurance company only needs to pay one death benefit.
Keep in mind, though, that most joint life insurance is issued as permanent life insurance , which is typically far more expensive than term life insurance. If you’re considering a first-to-die policy, be sure to compare the cost of obtaining two separate term policies. Obtaining two separate permanent policies may be more expensive than a first-to-die policy, but buying two separate term policies could still be cheaper than a single first-to-die policy.
Because first-to-die life insurance is an unusual product, you’ll need to work with a life insurance agent or broker to purchase a policy. Be sure to discuss the alternatives before you choose this type of coverage.
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