Joint Accounts

Accounts held under any form of joint ownership are insured up to $125,000. This insurance is separate from an account held by any of the co-owners as an individual account.

Scenario:
A and B maintain a joint account and in addition, each holds an individual account.

Insurance Coverage:
Each account is separately insured to the $125,000 maximum.


Scenario:
The following accounts are held by A, B and C-:
No. 1 A, as an individual – $125,000
No. 2 B, as an individual – $125,000
No. 3 C, as an individual – $125,000
No. 4 A and B – $125,000
No. 5 A and C – $125,000
No. 6 B and C – $125,000
No. 7 A, B and C – $125,000

Insurance Coverage:
Single Accounts:

A

B

C

No. 1

$125,000

No. 2

$125,000

No. 3

$125,000

Each account is fully insured up to the $125,000 maximum.

Joint Account:
Assumption
The interests of the co-owners of each joint account are deemed equal for insurance purposes.

A

B

C

Total

No. 4

$62,500

+

$62,500

= $125,000

No. 5

$62,500

+

$62,500

= $125,000

No. 6

$62,500

+

$62,500

= $125,000

No. 7

$41,667

+

$41,667

+

$41,666

= $125,000

$166,667

$166,667

$166,667

Maximum
Coverage:

$125,000

$125,000

$125,000

Required: Reduce each deemed allocation by 25%.
($41,667 / $166,667 x 100 = 25%)

New Configuration Showing Coverage Allowed:

A

B

C

Total

No. 4

$46,875

+

$46,875

= $93,750

No. 5

$46,875

+

$46,875

= $93,750

No. 6

$46,875

+

$46,875

= $93,750

No. 7

$31,250

+

$31,250

+

$31,250

= $93,750

$125,000

$125,000

$125,000


Scenario:
Three joint accounts are owned by A, B and C, as follows-:
No. 1 A and B – $125,000
No. 2 A and B – $30,000
No. 3 A and C – $45,000
Insurance Coverage:

No. 1 A+B

$125,000

No. 2 A+B

$30,000

$155,000

Accounts numbered 1 and 2 are owned by the same combination of individuals A and B. These are added together and insured to $125,000 in the aggregate, leaving $30,000 uninsured.

Since the respective interests of the co-owners of each joint account are deemed equal for insurance purposes, A has an interest of $62,500 in account No. 1, $15,000 in account No. 2 and $22,500 in account No. 3 for a total joint interest of $100,000.

A’s interest of $85,000 in accounts numbered 1 and 2 receives $62,500 proportionate share of the $125,000 insurance coverage on the two accounts, as does B’s interest, leaving $15,000 uninsured in each case.

A is entitled to $125,000 of insurance on the total of his interests in joint accounts owned by different combinations of individuals.

The proportion of $62,500 of this $125,000 is allocated to A’s interest in accounts numbered 1 and 2, leaving $62,500 of insurance available for his $22,500 interest in account No. 3, which is fully insured. C’s $22,500 interest in account No. 3 is also fully insured.

Thus, $85,000 of A’s total interest of $125,000 is insured; $62,500 of B’s $77,500 interest ($62,500 + $15,000) is insured; and all C’s $22,500 interest is insured. Of the $200,000 invested in the three joint accounts, a total of $170,000 is insured.

A

B

C

Total

Restricted

$62,500

+

$62,500

=

$125,000

No. 3

$22,500

+

$22,500

=

$45,000

$85,000

$62,500

$22,500

=

$170,000

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