Life Insurance for Married Couples: Coverage and Tips (2024)

Do married couples truly need life insurance? This question becomes harder to answer when you consider the various potential stages of married life, such as having a kid, taking on one or more mortgages, taking care of aging parents and funding a child’s education.

However, depending on their stage of life, not every married couple needs life insurance.

• Newlyweds. Some recommend that newlyweds have enough insurance to cover their mortgage and to replace their incomes should something happen to one of the partners. Without kids, the need for life insurance isn’t as strong, assuming the surviving spouse can continue to afford daily living expenses.
• Single-policy households. Some married couples take a life insurance policy out on just one spouse. One-policy households leave one of the spouses open to financial burden should something unexpected happen to the uninsured spouse. In this instance, the uninsured spouse may want to apply for the minimum life insurance coverage to pay for any mortgage expenses and income replacement, should there be a financial need.
• Empty nesters. As children become adults, parents feel less financial pressure to have life insurance as financial support for their kin. Their financial burden gone, parents can either terminate their policies or find a new purpose for the policy.

The primary benefit of life insurance policies is financial security for the surviving spouse and any surviving children. But how much life insurance is enough? Couples must look at their combined incomes and run through the math of what the family finances would look like if the unthinkable happens and one spouse is left to live alone and pay all the bills. You can start by looking at the following areas of a financial life.

• Income replacement. The passing of a working spouse can create financial strain on the household. Life insurance can cover the lost income and help maintain an existing standard of living.
• Retirement gap planning. Similar to income replacement, couples can use life insurance to secure each other’s retirement. Not only can it replace a deceased spouse or partner’s income, but it can also provide money for regular contributions to an individual retirement account.
• Debt and expenses. Mortgages, cars and credit cards are common debts that life insurance benefits can fund. If one spouse dies, the surviving spouse is often responsible for these financial obligations. You can also consider covering the hidden expense of paying for the deceased’s burial with final expense insurance.
• Childcare and education. Life insurance proceeds often pay for childcare and educational costs. They can also be directed to savings plans designed to pay for college.
• Peace of mind. At its core, life insurance ensures loved ones are financially cared for in the event of an unexpected death. The emotional and financial stresses that arise during such difficult times are lessened by life insurance. With insurance, a spouse doesn’t have to worry as much about the future if something tragic happens.

Every family is different. It’s important to evaluate the state of your personal finances should your spouse die: income, short- and long-term debt obligations, lifestyle and future goals. Consult with a financial advisor who can help you navigate the process to find the right policy for your needs.

Married couples have choices to make when it comes to picking a life insurance policy. Insurers offer multiple types, from term life insurance to whole life insurance to joint life insurance.

Term Life Insurance

Term life insurance provides coverage for a predefined, temporary period of time, typically ranging from 10 to 30 years. In certain situations some carriers may offer terms up to 40 years.

Term Life Features

• Specific coverage for temporary financial risks. Term is perfect to protect yourself from temporary financial risks such as mortgages, education expenses and loans.
• Cost-effective. Rates for term insurance are often inexpensive, and you can often tailor them to fit many different scenarios.
• Living benefits. Some term policies allow policyholders to access the death benefit while they’re still living. For example, if one spouse is diagnosed with heart disease and needs medical treatment, it’s possible to use a percentage of that spouse’s life insurance proceeds to cover medical expenses. It may save a couple from dipping into savings.

Advantages

• Affordability. Term life is the least expensive type of life insurance, and you can structure it to be affordable for most situations.
• Flexible uses. Term life is not only used for income replacement but can also be used to secure personal loans as collateral — or to satisfy buy-sell arrangements in family-owned businesses.

Considerations

• Temporary.  Coverage is temporary and must be designed for risks with specific timelines.
• Long-term care alternative. Some term life policies have built-in benefits that will help fund long-term care expenses.
• Convertibility. Not all companies’ term policies are created equal. If you think you might want to convert a term policy to a permanent policy down the life, it might be worth looking into whether the policy offers that option.

Whole Life Insurance

Whole life insurance is a form of permanent life insurance. It supplies coverage for someone’s entire life as long as premiums are paid.

Whole Life Features

• Coverage for your lifespan. This type of life insurance remains in force as long as premiums are paid, and it guarantees a death benefit to beneficiaries.
• Cash value accumulation. One of the reasons whole life insurance is more expensive than term life is because a portion of the premium accumulates as cash value within the policy. The value grows and becomes accessible through policy loans or withdrawals. Cash value life insurance is a useful tool for singles and married couples who want to diversify retirement savings.
• Steady premiums. Unlike universal life, whole life insurance has level premiums, meaning that they won’t increase.

Whole Life Advantages

• Coverage for your whole life. It doesn’t expire.
• Supplemental retirement savings. The policy can serve as a supplemental retirement solution, providing potentially tax-free withdrawals.
• Withdrawal flexibility. Whole life insurance policies generally lack qualified account limitations and have no restrictions on how you spend withdrawn cash value, meaning that you’re free to spend it on children’s education expenses, weddings or vacations.
• Medicaid protection: Cash values may be protected from Medicaid income thresholds when policies are owned by a properly structured trust.

Whole Life Considerations

• Budgeting: Whole life insurance is more expensive than term life insurance.
• Premiums are not flexible. Whole life insurance comes with fixed premiums that cannot be adjusted like universal life.
• Slow and steady growth. Cash values usually grow at a lower rate than traditional investments.
• Alternative investment vehicle. You can use a whole life insurance policy as a supplemental retirement vehicle when contribution maximums are met for traditional savings, such as 401(k) and 403(b) plans.

Joint Life Insurance

Joint life insurance, also known as survivorship life insurance, is a special type of policy that covers two individuals, usually married couples.

Joint Life Features

• First to die. It allows one policy for a couple and pays a death benefit upon the first passing.
• Second to die. This part of a policy makes a lump-sum payout upon the death of the surviving spouse.
• More flexible underwriting. Joint life policies can often have less strict underwriting because the risk is spread over two lives rather than one.

Joint Life Advantages

• Lower costs. In many instances for a married couple, the cost of joint coverage is less than two separate life insurance policies.
• It’s simple. You have just one policy to manage.

Joint Life Considerations

• It’s not always cheaper. When both spouses are healthy, individual policies may come out cheaper.
• Newlyweds aren’t usually good candidates. Young couples might wind up paying less for traditional life insurance for the same amount of coverage.

When it comes to married couples, there are two main approaches to obtaining life insurance: joint policies and separate policies. Both options come with unique benefits and potential drawbacks, and understanding them is crucial to make an informed decision that aligns with specific needs and goals.

Comparing Benefits: Joint vs. Separate

Comparing Considerations: Joint vs. Separate

Couples and partners should consider multiple factors when considering buying life insurance.

• Ownership. Individuals or trusts can own life insurance policies. Trust-owned life insurance can sometimes avoid triggering a taxable event upon the time of death of either spouse. The ownership decision is most important for older applicants concerned about potential Medicaid benefits.
• Coverage amount. How much coverage you need depends on your income, lifestyle and financial obligations. A financial advisor can help determine a more specific number based on market conditions and the individuals involved.
• Timeline of financial risk. Timelines change based on specific scenarios, financial risks, type of coverage desired and length of coverage.
• Retirement diversification: Spouses should review their retirement savings contributions to ensure they take advantage of earning the maximum match from their employers’ retirement plans. They might find a reason to use whole life insurance as a supplemental retirement savings vehicle.

Defining the best life insurance requires an understanding of the specific needs of a married couple. Here are three life insurance companies that we recommend for some of the common scenarios married couples face.

• Nationwide. Nationwide, our pick for bundling insurance, provides both term life and whole life insurance.
• State Farm. State Farm, our pick for customer satisfaction, has a strong joint universal life insurance policy available for couples ages 18 to 85.
• Mutual of Omaha. Mutual of Omaha, our choice for accelerated death benefits, stands out for many reasons. Its policies are cost-effective, and elderly married couples gain access to Mutual of Omaha’s burial insurance policy to cover final expenses. Married couples can buy a term life policy without taking a medical exam.

Finding the right life insurance can seem daunting when so much information is available online. Here are some tips for finding the right coverage for you and your spouse.

• Plan together. It’s common that one spouse handles getting life insurance for the family. However, both spouses should be included in the planning and discussions about coverage to create the peace of mind that is so important once the policy is in force.
• Compare policies. Many times policies are going to be nearly identical in cost, but some may have additional riders. It’s important to compare all the details that you gather from life insurance quotes to ensure one policy isn’t strikingly inferior to another.
• Get a second opinion. Even if you have a financial advisor or insurance agent, it is important to get a second opinion. If you only trust one person to provide options, you may be missing out on critical benefits that align with your financial strategy and life insurance needs.
• Understand the requirements. In most instances, policies that require medical exams will be less expensive than those that do not require medical exams. Budget-conscious families should be aware of the potential savings that come with completing a medical exam.

Married couples have different options for life insurance based on numerous factors.

• Newlyweds who are early in their lives and building their financial foundation may consider relatively affordable term life insurance to cover the mortgage and their spouse’s income.
• Married couples with children may consider additional death benefits to cover education expenses and childcare.
• Empty-nesters might consider reducing their life insurance as their children become self-sufficient in adulthood.
• Spouses with pre-existing health conditions or looking to save money might consider joint life policies.

The scenarios and options for life insurance are nearly endless, which reinforces the importance of working with someone you trust to navigate the complexities and have relationships with the right companies for you.

Purchasing life insurance doesn’t need to be difficult. Protect your loved ones by making the best decision for you and them.