Life Insurance for Married Couples

If you and your spouse rely on two incomes or are on the hook for joint debts, both of you may need life insurance.
Feb 5, 2016

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When you're building your life with someone else, the foundation that the two of you are laying may need the protection that life insurance for married couples provides.

More than 40% of Americans have no life insurance, according to a 2015 study by trade group LIMRA and industry nonprofit Life Happens. Another 19% only have group life insurance, the coverage available through work, which often isn’t enough to cover a family’s needs. Among 25- to 44-year-olds, 48% have no life insurance.

Here are some reasons to consider life insurance when you’re a married couple and some options for policies.

1. You’re adding more expenses

Couples often use their combined incomes to take on bigger financial obligations, such as renting a nicer apartment, buying a home or new cars and, possibly, having children. Many couples wouldn’t be able to bear these costs on just one income. One of the primary reasons for buying life insurance is income replacement, so that your family can continue their plans and lifestyle.

2. Your spouse may be responsible for your debts

Any debts left when you die would be paid out of your estate, meaning your assets. This will eat into what you pass on to your spouse.

Your spouse would be on the hook for debts in any joint accounts. Also, in community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), your spouse would be responsible for debts you took on after getting married, such as personal credit card balances.

3. Life insurance gets more expensive the longer you wait

The earlier you buy a policy and lock in life insurance rates, the more money you'll save over the long run. The prices you'll be quoted for policies will get more expensive with each passing birthday. On top of that, you never know when you might develop a medical condition that could lead to higher rates when you want to buy a policy.

Options for life insurance for married couples

Once you’ve decided to buy life insurance, the question becomes what kind of coverage to buy and how much you need. Your decision generally depends on what financial obligations you want to cover, how long those obligations last and how much you want to spend.

  • Term life insurance is suitable for many needs. It promises to pay a set amount if you die while the policy is in effect. You decide how much the payout would be and how long the policy should last. You can time a term life insurance policy to match a financial need. For example, if you want to make sure your spouse has a way to replace your income for the next 10 years, you can buy a 10-year term life policy in an amount that would match the income. Term life is the most affordable way to buy life insurance protection.

  • Permanent coverage, such as whole life insurance, lasts your entire life and builds cash value. It is good for people who want to provide money no matter when they die, such as funds to pay for a funeral. Because you can take a loan against the cash value, it can also be used as a source of funds later in life.

There’s also joint life insurance, which covers two people under one policy and is typically cheaper than buying a separate policy on each person.

  • First-to-die life insurance: This pays out upon the death of the first person. After that, the policy ends; it does not then extend to the surviving spouse. The surviving spouse could use the money to pay off a mortgage balance or other debts. Note that this type of life insurance may be hard to find because there are few sellers.

  • Second-to-die life insurance: Also called survivorship life, this pays out when both spouses have died. It’s generally used by wealthy couples who want to make sure heirs, such as adult children, have money to pay estate or inheritance taxes.

If term life insurance matches your need, NerdWallet’s life insurance tool can help you figure out how much coverage you need and comparison shop.

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