The only way I've ever done it. The down side is most motor hoists are at the edge of their capabilities supporting the motor, the tranny and the transfer, the whole unit weighs a lot. Another is, even with the complete front clip removed the transfer is going to hit the ground before you can get the front of the engine high enough for the bell housing to clear the firewall and the lower radiator mount, the whole unit is long. I had to jack the XJ up, get the motor, tranny and transfer most of the way out, then lower the body to get the hoist up high enough to clear the rest.
IMO it was still easier than separating the two and taking them out separately. Though the next time I may try removing the transfer first. The balance point is way towards the rear and very near where the bell housing bolts up to the tranny or near the rear of the head.
I've take many motors out in sections (other than the XJ), not that big of a deal, but getting the motor mated back up with the tranny, when you re-install it in the vehicle can be a pain. You not only have to really watch out not to damage anything, the height and the angle are critical. Way too much trial and error IMO and a greater the chance of screwing something up. I prefer to mate the sections up on the ground and then re-install them as a unit, if possible.