Life insurance for couples
Life insurance is essential for couples, married or unmarried, who have dependents or rely on each other financially. Several coverage options are available for couples, including individual life insurance, joint life insurance, and group life insurance offered through employers.
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What life insurance options are available for couples?
There are a few different life insurance options for couples. The best one for you and your partner may vary based on your financial needs and the plans for your estate once you pass away.
- Individual life insurance: Both you and your partner buy separate life insurance policies, naming each other as the beneficiary.
- Joint life insurance: You buy one joint life insurance policy that covers both of you, paying out either when one of you passes away or only when both of you pass away (known as a survivorship life insurance policy).
- Group life insurance: If you and your partner can access group life insurance through your employers, you could purchase coverage through them instead of buying individual or joint policies.
Which type of life insurance is best for couples?
You should choose a life insurance policy that matches your financial needs, desires, and overall estate planning. For example, if you and your partner have children together and want to leave them a nest egg after you both pass away, then a joint survivorship life insurance policy may fit your situation.
Here's a closer look at how each type of life insurance for couples works:
Individual life insurance
How it works: You and your partner buy separate individual life insurance policies, naming each other as beneficiaries and insuring yourselves for the amount needed to replace your financial contribution to the relationship.
Pro tip:
If one of you is the sole breadwinner, then you may decide to buy only one individual life insurance policy. However, you should consider buying two policies if one of you primarily takes care of your children since the cost of childcare can be significant.
Things to consider: Buying two separate policies can cost more than buying one joint life insurance policy. However, the surviving partner would still have their life insurance policy in addition to receiving the death benefit from their partner's policy, so you don't have to worry about coverage gaps.
Coverage available: Either term or permanent life insurance.
Joint life insurance
How it works: You and your partner buy one joint life insurance policy that covers both of you. You can choose either a:
First-to-die policy: Pays out a death benefit to the surviving partner.
Second-to-die policy: Pays out a death benefit after both partners pass away.
A first-to-die policy may make sense if you have young dependents and your partner would need the death benefit to pay for everyday expenses, debts, etc. A second-to-die policy is geared toward couples who are interested in leaving a nest egg behind for their grown children or who have a dependent that requires long-term care.
Things to consider: A joint life insurance policy may be more cost-effective than buying separate coverage, but it's more difficult to update in the event of a divorce. Plus, if you only have a first-to-die joint policy, then your surviving partner would be left without life insurance coverage. And with only a second-to-die policy, your partner won't receive a death benefit when you pass away.
Coverage available: Primarily permanent life insurance.
Group life insurance
How it works: Just like buying two individual life insurance policies, you and your partner opt into your employer's group life insurance policies.
Things to consider: Group life insurance is one of the most affordable ways to get coverage, but the amount of coverage available can vary by employer, and you may need to add supplemental life insurance to get the coverage you need. Plus, you usually can't keep your coverage if you change jobs. For sole breadwinners, you may be better off choosing an individual or joint policy to avoid losing coverage due to switching jobs.
Coverage available: Primarily term life insurance.
Pro tip:
You can buy multiple types of life insurance as needed. If you have kids from a previous marriage, you may opt to buy an individual policy to provide for their needs. You can also buy a joint policy with your current partner to cover your mortgage and other joint expenses.
How much life insurance should a couple have?
Generally, it's wise to buy enough coverage to replace your income, cover your mortgage, debts, ongoing expenses, and funeral expenses, and possibly leave a financial cushion for your loved ones. Our life insurance calculator can help you estimate the coverage you need.
Can unmarried couples get life insurance?
Yes, unmarried couples can generally buy any type of life insurance. However, you may need to demonstrate an insurable interest if you purchase a life insurance policy that covers your partner, such as submitting a will or proof of a joint mortgage. This supporting documentation shows the insurer that you would suffer financially if your partner were to pass away.
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