Sounds like what you guys are talking about is a convenient tool used
to "price" the policy... there are two people involved in a
second-to-die policy, and so if the pricing math was computed only
according to as if both were the older person's age, then the policy
buyer gets overcharged (older person, more risk of death), and if the
pricing is pegged to as if both were the younger insured's age, then
the insurance company cheats itself by not factoring in the risk of the
older person's shorter life expectency... and so an average age serves
as the equalization factor... it reduces the pricing from as if they
were both priced at the older person's age, yet increases the pricing
from as if they were both priced at the younger person's age.

But I don't think that's what JEA actually is... here is the wording on
the policy of a neighbor of mine that got us discussing it...

"While this policy is in force, BigBucks Insurance Co will pay the
death benefit to the Beneficiary if both Joint Insureds dies before the
policy anniversary nearest Joint Equal Age 100, or will pay the net
cash value, if any, to the owner on the policy nearest Joint Equal Age
100 if both or either Joint Insured is living on that date."

So see, here the JEA is 100 because the policy is for if both insureds
perish before that age... it's not because one person is currently age
105 and the other is currently aged 95 and they took the average of 100
to utilize as a single factor in the pricing formula.

If the policy were mine, I'd ask the agent that I bought it from about
it, but I'm not that involved in it... though I'd like to learn more
about these things before being sold one in the future.

Cal wrote:

- quote -

This is a second to die policy, right?
Adding a second person, no matter how old or sick, would not reduce the
67 year old's life expectancy. The second to die policy must always cost
less than that of just a policy on the younger insured. Otherwise, why
bother? You are right, that the younger could always die first, but
adding the second person doesn't make it any more or less likely.
JOE

- quote -

You are neglecting the potential for the younger person to die BEFORE
the older person. Improbable, but still a necessary risk that the
insurer must take into account.....
Cal

Cal wrote:

- quote -

old, I agree the 67 year old will cost less, likely $300 (I thought I
read that the chance of death is somewhat logarhythmic doubling every 7
years or so). But then the cost to pay on the second death will
certainly be less than the $300 quoted for the 67 year old, not the
average of the two.
The chance of them both dying is less no matter whom you add. (i.e.
adding anyone to the 67 year old will give a rate lower than the 67 year
old) Can't do that math in my head, but it's certainly closer to $250
than to $400.
JOE

In a nutshell, JEA refers to a mean average between two ages.
The cost of insuring ONE life for a person age 73 is $XXXX.
The cost of " " " " " " 67 is LESS
since that person will live longer, and pay more through out those extra 6
years.

The cost of insuring both lives, but only paying on the death of the second
one is a rough median between the two.



<studylogic06[at]yahoo.com> wrote in message
news:1156008799.751803.11590[at]75g2000cwc.googlegroups.com...
- quote -

Hi,

Can someone provide a definition/explanation for the term "Joint Equal
Age" (JEA) that is often spoken about in survivorship or second-to-die
life insurance?

I've seen some short explanations while reading articles on insurance,
but are of no help because the writer is explaining it as if talking to
himself rather than to someone who really hasn't a clue.

Thanks for any help.