My spouse has life insurance. Do I need some too?

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My spouse has life insurance. Do I need some too?

Life insurance is, first and foremost, a financial safety for families. If a policyholder dies, their beneficiary receives a lump sum of money so they can still pay the bills. For a primary breadwinner, the decision to buy coverage is a no-brainer. For their better half, a second policy might seem like an unnecessary expense.

Do you really need life insurance if your spouse has some?

The answer, in most instances, is yes. Death doesn't discriminate and, if you're young and healthy, now's the time to get coverage. Premiums go up alongside your age and the development of any health conditions, so putting off a policy — say, until you have kids or roles reverse and you're earning a higher income — is risky. (We can help you compare and buy affordable life insurance here.)

Here’s when you should consider a life insurance policy, even if your spouse has one.

1. Your family relies on you

Even a small income is integral to paying the bills. If you’re a stay-at-home parent, you provide child care and other services your spouse must cover in your absence. A single parent spends 35.6% of their household income on child care costs for one kid, according to a report from Child Care Aware of America.

2. Your have outstanding debts

Debt doesn’t really die with you. If your spouse co-signed your mortgage, auto loan, credit card or more, they’ll have to pay those balances … without your assistance. Ditto for any debt you incurred during your marriage if you live in a community property state. Debts solely in your name become the responsibility of your estate — and can deplete funds or assets you intended for your heirs.

3. You want to leave a tax-free legacy

Creditors are usually barred from going after life insurance payouts. That money belongs to your beneficiary and they generally won’t pay taxes on it. So, if you want to protect a child’s inheritance or help a spouse pay big expenses, like college tuition, should you die, life insurance is the way to do so.

4. Funeral costs would deplete your emergency fund

A parent’s death creates an extra and immediate financial burden for families. The median cost of a funeral, burial services and vault was over $8,500 in 2015, according to the National Funeral Directors Association.

Are there times both spouses don't need life insurance?

If you're retired, debt-free, sans dependents and sitting on ample savings, you probably don't need a policy. And, if you're a stay-at-home parent, a smaller and shorter term life policy will typically suffice. (In fact, some life insurers might cap the amount of coverage you can buy in that scenario.) Fortunately, couples can tailor their policy to each individual’s needs.

You can find a full guide to buying life insurance with your spouse here.

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