Csdrhrt

This is probably a stupid idea ...

My wife and I both make decent salaries. We believe that either of us could raise our child on a single income if the other passed away. If both of us passed away, our current assets would not provide for our child. In that respect, we don't need what I will call typical term life insurance, but instead only need life insurance that will pay out when we both die (assuming we die within the term). This seems like it would change the risks of the insurance company and should result in a cheaper premium.

Does this product exist? If so what is it called?

If it does not exist, why not?

https://www.investopedia.com/terms/s/secondtodieinsurance.asp

What is Second-To-Die Insurance

Second-to-die insurance is a type of life insurance on two people (usually married) that provides benefits to the beneficiaries only after the last surviving person on the policy dies. This differs from regular life insurance in that the surviving partner doesn't receive any benefits after the spouse dies. Thus, second-to-die insurance is used for estate planning

The product is called second to die as mentioned in Ronjon’s answer or survivorship life as you saw. I think you’ll find that the premiums for 2nd to die aren’t enough cheaper to make it the right choice for you. Especially considering that you would either continue to pay the premium after the first spouse dies or pay a higher initial premium if a rider is available to waive the premiums after the first death.

Probably your best option especially if you are focused on term insurance is to choose an amount that would provide for your dependents and split that amount of term insurance between the two of you. This offers a few benefits. One is that the premium after the first death would be smaller and could be dropped entirely if the insurance needs are covered by savings up to that future date and the proceeds of the first policy. Another is that if you considered the impact of the death of one of you on your ability to reach your education or retirement goals or possibly other goals you’d probably find there was at least some need that the smaller amounts of separate term insurance could cover. Your ability to save for those goals would likely be reduced on the death of one of you.

As other's have mentioned in some jurisdictions this type of product is called second to die insurance. Alternatively it is called a Joint Life Second Death (JLSD) policy.

The premium for such a product will typically be smaller than a Single Life policy or a Joint Life First Death (JLFD) policy of the same duration, but it depends on how your insurance company structures the premium.

Typically these types of polices are taken out as Whole of Life (WoL or WL) policies (at least where I am located UL (Universal Life) is not a product sold on the market). Whether or not a term or WoL product is more appropriate for you is something you would need to consider.

You may also want to take out accident insurance or Permanent Disability Insurance (TPD) to mitigate against the situation where one of you survives but can't provide for your children.

You can also take out a policy that pays out twice, once for each life. These types of policy are called Dual Life (typically). They should (in general) be equivalent to a JLFD policy and a JLSD policy added together (though two separate policies may be slightly higher due to having to account for setting up two policies instead of one).

It is also possible to get deferred versions of these polices, which defer the start date of the policy to some point in the future.

Finally, you can get Unit Linked (investment style policies) and With Profits (aggregated investment type policies) which can augment the payout (but carry some investment risk as well).

As with anything potentially this complicated it is worth getting professional financial advice on.