Posted by Choosing life insurance as a couple requires more than just picking a policy. Learn how to align coverage with your shared goals and avoid common pitfalls. When newlyweds Jenna and Kyle bought their first life insurance, they assumed identical policies would suffice. But when Kyle passed unexpectedly, Jenna discovered his coverage barely touched their shared debts, leaving her struggling financially. Their story illustrates why couples need tailored life insurance strategies that reflect their unique needs, not just standard policies.
Joint Versus Separate Policies
Couples often consider joint life insurance for simplicity, but separate policies usually provide better flexibility. Joint plans come in two types. First to die policies pay out when either spouse passes while second to die policies only pay after both die, often used for estate planning. While joint policies streamline paperwork, they can become problematic if divorce occurs or if one partner’s health changes drastically.
Separate policies allow customization with higher coverage for the primary earner, adjusted terms based on health, and individual beneficiary designations. A blended approach sometimes works best. One couple kept separate term policies for income replacement but added a joint second to die policy to cover future estate taxes.
Calculating Real Coverage Needs
The old ten times salary rule often falls short. A better approach weighs several factors. Income replacement for working years matters most for breadwinners. Mortgage and debt obligations must be covered to prevent burdening the surviving spouse. Families should account for childcare and education costs if applicable. Retirement gaps that would challenge a widow or widower also need consideration.
One stay at home parent discovered they needed substantial coverage not for income but to replace the cost of childcare, housekeeping and other unpaid labor that would otherwise drain family resources.
Term Versus Permanent Solutions
Young couples typically benefit most from affordable term insurance covering their peak earning years. Those in their fifties and sixties might blend term with permanent coverage to address final expenses and legacy goals. One couple used a laddered term approach with five hundred thousand dollars for ten years covering their remaining mortgage plus two hundred fifty thousand dollars for twenty years protecting their retirement plans.
Whole life policies make sense in specific situations. Those with estate tax concerns may need permanent coverage. Families with special needs children often require lifelong support provisions. When one partner has health issues threatening future insurability, locking in permanent coverage early proves wise.
Critical Ownership Considerations
Who owns the policy impacts more than most couples realize. When the insured person owns their policy, death benefits generally avoid estate taxes. But when spouses own each other’s policies, payouts become part of the owner’s taxable estate. One couple avoided significant estate taxes simply by restructuring policy ownership through an irrevocable life insurance trust.
When to Review and Update
Major life events demand insurance reviews. Marriage or divorce fundamentally changes coverage needs. The birth or adoption of children introduces new dependents. Home purchases often require adjusted protection levels. Career changes affecting income necessitate reevaluation. Health developments may allow improved rates or require guaranteed issue products.
One couple nearly left their disabled daughter unprotected because they hadn’t updated beneficiaries after her diagnosis. Another failed to increase coverage after starting a business, leaving their spouse vulnerable to commercial debts. Regular reviews ensure policies evolve with life’s changes.
Life insurance for couples isn’t about finding the cheapest policy but creating a safety net that evolves with your relationship. The best plans account for both current realities and future uncertainties. As Jenna learned too late, love means having difficult conversations now so grief isn’t compounded by financial stress later. Whether just starting out or enjoying retirement together, proper coverage lets you face tomorrow knowing you’ve protected each other no matter what comes.
References
Western & Southern Financial Group. (2025, January 31). What to know about life insurance for married couples. https://www.westernsouthern.com/life-insurance/life-insurance-for-married-couples
Bankrate. (n.d.). Life insurance for married couples. https://www.bankrate.com/insurance/life-insurance/married-couples/
Pembroke Financial. (2024, December 17). The pros and cons of choosing joint life insurance. https://pembrokefinancial.co.uk/the-pros-and-cons-of-choosing-joint-life-insurance/
ANZ. (n.d.). Life insurance for couples. https://www.anz.com.au/personal/insurance/guides-to-insurance/life-insurance-for-couples/