Shopping for life insurance with your spouse

Setting up the right financial plan for your family involves life insurance coverage for not just you, but also your spouse.

Nupur GambhirRebecca Shoenthal author photo

By

Nupur Gambhir

Nupur Gambhir

Life Insurance Expert

Nupur Gambhir is an insurance editor at Policygenius and licensed Life, Health, and Disability agent in New York.

&

Rebecca Shoenthal

Rebecca Shoenthal

Licensed Insurance Expert

Rebecca Shoenthal is an insurance editor and licensed Life, Health, and Disability agent at Policygenius in New York City. Previously, she worked as a nonfiction book editor. She has a B.A. in Media and Journalism from the University of North Carolina at Chapel Hill.

Updated August 23, 2021|9 min read

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If you’re shopping for life insurance, you recognize the need to have a financial safety net for your family. But if you’re married, your safety net probably won’t be complete unless your spouse also has a life insurance policy. Married couples shopping for life insurance together have a few key considerations when setting up the right coverage for their family.

Shopping for life insurance with your spouse is similar to shopping for an individual life insurance policy without them. You’ll need to ensure that your policy adequately protects your dependents, which means determining how much coverage you need and how long your policy should last. But married couples have unique considerations when shopping for life insurance, including whether to choose a joint policy and how much coverage is needed for stay-at-home parents.

Key Takeaways

  • Married couples have the option of buying separate life insurance policies or a joint policy

  • Joint life insurance policies insure both spouses, but are costlier and are rarely the best option for couples

  • Though non-working spouses don’t provide an income, life insurance can compensate for the loss of the labor they perform

  • It is illegal to take out a life insurance policy on your spouse without their knowledge

Separate vs. joint life insurance policies

One factor unique to shopping for life insurance with a spouse is the ability to purchase one policy that covers both of you, called a joint life insurance policy. However, separate life insurance policies tend to be more common, cheaper, and offer more robust coverage for couples.

Separate life insurance policies

Purchasing separate life insurance policies at the same time doesn’t necessarily result in lower premiums, though separate policies tend to be less expensive than joint life insurance policies. That’s because purchasing two separate policies allows each policy to be tailored to each spouse’s individual needs. For example, you may want the breadwinner to have more coverage than a stay-at-home spouse, or you may want only one person to have riders that offer extra provisions, like early access to the death benefit.

Married couples purchasing separate life insurance policies can still save time by scheduling a joint medical exam. This is the part of the underwriting process where the medical examiner performs a physical to get an idea of your current health and medical history to determine what life insurance health classification you receive.

Joint life insurance policies

A joint life insurance policy is one life insurance policy that covers two people and is usually a permanent policy. Joint life insurance is only available to married or domestic partners. The main consideration is if you want a first-to-die policy or a second-to-die policy.

  • In a first-to-die joint policy, the policy will pay out upon the death of the first policyholder. If the surviving spouse wants coverage, they’ll need to apply for a new policy.

  • With a second-to-die joint policy, also known as survivorship life insurance, the policy doesn’t pay out until both policyholders are deceased.

Both types of joint policies have benefits and drawbacks. First-to-die policies are typically more expensive, but second-to-die policies don’t work as well as income replacement since both policyholders must be deceased before the policy pays out.

Which type of policy is best for you and your spouse?

Separate term policies are typically the best option for married couples because they’re less costly and provide flexibility in terms of how long each policy lasts and what customizing riders each policy has. And, in the case of a divorce, splitting up a joint life insurance can get tricky.

“Joint life insurance is usually never a good idea,” says Policygenius senior sales associate Warren Robbins. By buying separate policies for you and your spouse, you ensure each of you is getting the best premium rates for your specific health profile, age, and gender and you don’t end up paying more to accommodate one person’s advanced age or poor health.

Joint life insurance policies can be a good option in specific situations, such as if one spouse’s health prevents them from getting their own life insurance policy. As mentioned, this will result in higher premiums for the spouse in better health.

The best life insurance for married couples will depend on the individual circumstances, so you should talk to a licensed expert about whether separate policies or a joint policy is right for you and your spouse.

→ Learn more about how life insurance works after a divorce

Life insurance for stay-at-home parents

Since life insurance is primarily for income replacement, it may seem like non-working parents don't need it. But while non-working parents don’t provide direct income, they do perform labor that would have to be replaced if they weren't around, including care for dependent children.

A non-working spouse can qualify for a certain amount of coverage in proportion to their working spouse, though this varies for each life insurance company. The graph below demonstrates the type of coverage offered to non-working spouses by the top life insurance companies:

LIFE INSURANCE COMPANYNON-WORKING SPOUSE POLICY
AIGMatches up to $1.5 million of working spouse's coverage. Coverage limited to 10x working spouse's income if household income is less than $25k.
Banner LifeMatches working spouse's coverage. If household income is below $20k, no coverage will be offered.
BrighthouseMatches working spouse's coverage. If household income is below $20k, no coverage will be offered.
Lincoln FinancialMatches 100% of working spouse's coverage. Maximum coverage is determined on a case-by-case basis.
Mutual of OmahaMatches 100% of working spouse's coverage up to a maximum of $2 million
Pacific LifeMatches 100% of working spouse's coverage up to a maximum of $3 million ages 70 and below. Matches coverage on a case-by-case basis ages 71 and above.
PrudentialMatches 100% of working spouse's coverage. Maximum coverage is determined on a case-by-case basis.
SBLIMatches up to $2 million of working spouse's coverage. Higher amounts considered on a case-by-case basis.
SymetraCoverage for a non-working spouse cannot exceed the insured's coverage. Maximum coverage is determined on a case-by-case basis.
TransamericaN/A

Methodology: Information based on policies offered by Policygenius as of 8/23/2021.

→ How much life insurance do parents need?

Supplemental spouse life insurance

Your spouse may also be able to get some coverage through your employer with supplemental spouse life insurance. This is best used to increase their existing coverage or if they don’t qualify for a traditional policy.

Supplemental coverage is group life insurance that some employers offer in addition to the base coverage included in your benefits package. The supplemental coverage can usually be bought for yourself, your spouse, or your dependents. 

A few caveats apply: 

  • Employers can limit the amount of additional coverage available

  • You lose supplemental spouse coverage if you leave your employer

  • Your spouse may be asked medical questions and can be denied coverage 

Because of the connection to your employment status and other potential restrictions, it’s best to treat supplemental insurance as a complement to your existing life insurance plan.

Life insurance and domestic partnerships

In the last 20 years, how the typical American family looks has evolved. A larger share of adults have cohabited than have been married since 1995, according to Pew Research Center. How does this affect your life insurance coverage?

If you’re in a domestic partnership or civil union, you need the same protections as couples who are married. You share bills, mortgages, and dependents, and require the same amount of coverage and benefits that married couples do. So what type of life insurance coverage can you get if you’re in a domestic partnership? As long as you can prove insurable interest, you’re eligible to get a policy and list your spouse as your beneficiary.

If you’re not legally married, you are still eligible for life insurance coverage but may be asked additional questions during the underwriting process. Life insurance companies will usually want to see your financial justification for getting life insurance coverage. Regardless of your marital status, you’ll need to demonstrate that your dependents would financially suffer if you died unexpectedly.

If you’re married, this process is a little more cut and dry. For unmarried couples, you may have to provide supplemental documentation to demonstrate that you and your partner share expenses, live or own a home together, or share dependents. Essentially, if you can demonstrate to the underwriter that your beneficiary will incur a financial loss if you die, you shouldn’t have a problem getting life insurance coverage — there just might be some extra paperwork.

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How spouses can shop for life insurance together

After you and your partner determine how much life insurance you need, the rest of the buying process is the same as it is for single shoppers.

How much life insurance married couples need

By figuring out the right amount life insurance you need and a term policy’s length that makes sense for your family, you can avoid overpaying for coverage.

Life insurance coverage is an income replacement, meaning you’ll want to consider the financial impact of losing either person in the partnership. The best way to do this is to take a needs-based approach and calculate your financial obligations, taking into account:

Choosing a beneficiary

Your life insurance policy’s primary beneficiary is the person who receives the death benefit if you die. Policyholders can choose multiple beneficiaries and even a contingent beneficiary, or the person who gets the death benefit if the primary beneficiary is unable to collect the money.

Most spouses shopping together choose their partner as the primary beneficiary, though you also have the option of choosing your children or even an institution. It’s usually not recommended to name your children as the beneficiaries on your life insurance policy because most life insurance companies are prohibited from paying out the death benefit to anyone under the “age of the majority,” which is 18 in most states and 19 in Alabama and Nebraska.

Another consideration for married people shopping for insurance: community property laws. If you live in the following nine states, you need your spouse’s consent to name someone other than them as your beneficiary:

  • Arizona

  • California

  • Idaho

  • Louisiana

  • Nevada

  • New Mexico

  • Texas

  • Washington

Deciding between term or whole life insurance

When you’re purchasing life insurance, you need to decide how long you would like your coverage to last. A term life insurance policy offers coverage for a specific period of time, anywhere from five to 30 years, while a permanent life insurance policy lasts your entire life.

Because term life insurance policies are cheaper, they tend to be the best policy option for most people.

“On average, permanent coverage can be five to 15 times more expensive than a term policy with the same benefit amount. This range can vary based on the length of the term you are comparing and the type of permanent product and features within that product,” says Patrick Hanzel, Advanced Planning Specialist and Certified Financial Planner at Policygenius.

→ Compare term vs. whole life insurance

Picking the right life insurance company

The health status of both you and your spouse will likely determine what life insurance company you purchase your policy from. Some are better than others at accommodating health conditions like diabetes or high cholesterol and provide lower premiums for applicants with those conditions.

Other considerations, such as your occupation and family history will also impact the types of rates you receive on a policy.

Though you and your partner may go through the life insurance application process together, you may end up purchasing policies from different life insurance companies based on your individual circumstances.

Can you take out a life insurance policy on your spouse?

One final consideration: can you buy a life insurance policy for your spouse without involving them, or vice versa?

The way that the life insurance application process works, it’s not possible. If you do manage to find a loophole that allows for you to purchase a policy without their approval — such as forging their signature — it’s illegal.

To get a life insurance policy, the individual who will be insured needs to take the life insurance medical exam. Even if you opt for a no medical exam life insurance policy, they would need to sign for the policy and give their consent. Signing for the policy on your partner’s behalf — or anyone for that matter — is considered life insurance fraud and has serious consequences.

However, if your partner is willing to participate in the underwriting process and is willing to sign off on the policy, you can still take out a life insurance policy on them and pay the premiums. To do so, you’ll still need to prove insurable interest, or proof that you would be financially burdened if they die.

Married couples rely on one another in many ways, especially financially. Spouses looking for life insurance and financial protection have a few more considerations to make, such as how long each person wants their policy to last, who they need to provide for, and whether a joint policy is right for them.

→ Speak to an agent about what type of life insurance is right for you and your spouse.

Life insurance for spouses FAQs

Should both spouses have life insurance?

If both spouses provide some level of support for the family, then both people should have life insurance coverage. The amount of life insurance needed varies based on each spouse’s income or contribution to the household (such as child care or housekeeping), and outstanding individual or joint debts.

Is life insurance cheaper if you are married?

The cost of life insurance isn’t impacted by marital status. It depends on factors such as your health, age, lifestyle and gender.

What is joint life insurance?

Joint life insurance covers multiple people. Most joint life insurance policies are permanent policies with a cash value component that can earn interest and tend to be more costly than individual life insurance policies.

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