Term Life Insurance For Married Couples: Best 2023 Guide

Authentic Guide to Buying Term Life Insurance For Married Couples

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Every day is the honeymoon phase in a beautiful marriage. You feel like you are riding on cloud nine, and everything feels so surreal. But life is filled with unexpected occurrences. Perhaps the pandemic has even put things into perspective, and now you are thinking of getting life insurance to protect your family if the worst happens.

However, you are a little conflicted about which option to go for or which insurance company would serve you best. Not to worry! This article discusses the perks of getting term life insurance for married couples. At the end of this article, your decision will be a lot easier. Read on!

Trying to decide if you should get term life insurance for married couples? This article will show you why married couples need life insurance, the options for life insurance for married couples, why term life insurance for married couples is ideal, and how to save money on your rates.

Why Do Married Couples Need Insurance?

Do these ring a bell? In sickness and in health, for richer or poorer, in good times and in bad, as long as we both shall live? Yes! Those beautiful vows you took with your spouse with a beaming smile. These vows were made for a reason as life is filled with unexpected occurrences. This is why you need insurance planning.

Insurance planning puts you and your family one step ahead of failing health, tight finances, and bad times generally. Talking about insurance planning, an important option is life insurance. Sure, you want to grow old and gray together; however, it’s best to be prepared in case the unthinkable happens.

What is Life Insurance?

Life insurance, just like other insurance options, is based on the fact that though you don’t want the worst to happen, the insurance policy will make provisions if it does. Your insurance policy will contain a contract between you and the insurance company. 

You’ll agree to pay premiums either monthly, semi-annually, or yearly and in return, the life insurance company will make a payment to your chosen recipient if you were to die. Life insurance is more than just a potential solution to “in case someone dies. It can also be about how you’ll live your life, both in the short term and the long term. 

Why Should Married Couples Purchase Life Insurance?

If you are still trying to decide whether buying life insurance as a couple is worth it, here are some reasons you should consider: 

• Covering Living Expenses

Many couples join incomes to cover bigger financial obligations like buying a new home, renting an apartment, buying cars, or even having children. In the absence of one spouse, covering these expenses might be impossible. This is one of the significant reasons you need to purchase life insurance. It would serve as a replacement for the absent income. That way, your family can continue their lifestyle and goals.

• Covering Your Debts

Your partner may be left responsible for covering your debts alone if you pass away, especially if they are in your joint accounts. These debts could include mortgages, debts on credit cards, and even student loan debts. Completely paying off these debts would require a lot of money, which would be too much burden for your spouse to take on. If you do not want to weigh your spouse down with this, you should consider getting insurance coverage to handle them.

• The longer you wait, the more expensive life insurance gets

Your premium increases with each passing year. Buying a policy early lets you save money on your rates in the long run. Apart from these, you can’t predict when a medical condition that could cause your rates to increase might arise so the earlier the better. 

The Options for Life Insurance Policies For Married Couples

There are two types of life insurance in the insurance world: Term life insurance and whole life insurance. Choosing a life insurance policy out of the options can be daunting. It’s also vital for you to know each of these options’ financial implications so you can choose which one works for you. Many couples purchase term life insurance for married couples and you are about to know why. Let’s discuss these options briefly:

1. Term Life Insurance for Married Couples

Term life insurance is arguably the easiest and most common type of life insurance for married couples. You’ll select a term, usually 10 or 20 years, during which your spouse will get payment in case you pass away. The premiums on term life insurance for married couples rise at each renewal, sometimes by a huge amount!

The cost of a term policy differs based on individual factors. However, you can save money if a medical exam confirms you’re healthy at your renewal date. Women are also likely to pay less because they have a longer life expectancy than men. 

2. Whole Life Insurance for Married Couples

This type of life insurance is not very common with young couples because the premiums are expensive. Most young couples purchase term life insurance for married couples. Whole life insurance is a permanent life insurance that lasts your whole life. This policy benefits people who want to provide money no matter when they die. However, it’s most beneficial for high-net-worth individuals because of the tax implications.

When deciding on an option, it’s vital to remember that bigger is not always better in life insurance. The more your insurance coverage, the more you’ll have to pay on premiums. To keep your premium cost as low as possible, it will be a good idea to sit down with your spouse and spend time considering your needs carefully.

You can use a life insurance calculator to determine how much life insurance you will need. Doing this will help you choose the amount of coverage that will sufficiently cater to your family’s needs without breaking the bank while at it.

How Expensive Is Life Insurance Policy for Married Couples?

The cost of a term life insurance policy depends on individual circumstances. If you are a healthy man in your mid-twenties to mid-thirties, you can expect to pay $15 to $30 monthly for a $250,000 policy coverage. Your wife will possibly pay less because women are said to have a longer life expectancy than men. Sicknesses like cardiovascular disease averagely happen earlier in men. 

On the other hand, permanent life insurance, like whole life insurance, is more pricy. This is because you can use them as an investment vehicle. You can cash out your policy and use it for your retirement goals or other bills, but many financial experts advise against this unless it’s your last resort. Check the tax consequences of cashing in your permanent life insurance policy.

Permanent life insurance policies can be four or five times as expensive as a term life policy. For instance, a man in his mid-twenties to mid-thirties could pay up to $150 a month for a whole life insurance policy. Before purchasing a life policy, it’s important to know if you will be able to afford it in the long run because you’ll be signing up for a ten, twenty, maybe even a thirty-year commitment.

Unlike a permanent life insurance option, your policy cancels if you stop paying premiums on your term life insurance. You can get a 30-day grace period from your insurance company if you forget a payment or have issues with your billing, but regularly paying each month saves you from administrative headaches. 

Now that you know the options and their costs, the question is, which should you get? We’ll be discussing why you should get term life insurance, and with good reasons.

Why Is Term Life Insurance for Married Couples Ideal?

As explained earlier, out of the types of life insurance,  term life insurance for married couples is the easiest and most affordable. It pays an agreed amount if you die during the period the policy is in effect. You determine both the amount of the payout and the duration of the policy. Once the term ends, the policy ends.

The idea behind this is that at the end of the term, you’d have enough assets that would cover your surviving spouse and family members’ financial comfort, even in your absence. So, it protects you till you’re self-insured and saves you from paying for life insurance after you need it. You can use a term life insurance calculator to calculate your term life insurance needs so you can buy the ‘right amount’ of term life insurance.

This policy serves as protection for your loved ones during your active earning years. These are usually your most vulnerable years. It is the period you and your family may have large bills or debts to pay, like mortgages, college fees, or car payments, to pay.

How Does Term Life Insurance Work For Married Couples Work?

When you buy term life insurance for married couples, there are two ways it can turn out. Let’s draw a quick scenario. You pick a 20-year term policy at a $400,000 rate and name your wife as the beneficiary. If you die 12 years later, the insurance company will give your wife two options. 

One is the option of receiving a tax-free lump sum as a payout. She can use this payout to pay for college tuition, mortgage, etc. Generally, it gives her a measure of stability while she’s trying to pull through life without you. After receiving the lump sum, your term policy is paid out. This means that your wife would no longer pay premiums, and the “term” is cancelled. 

The second option is to choose an installment payment plan, paid from an interest-earning account. If your beneficiary (your wife in this scenario) is a high-earner with assets, she may choose this option. However, that decision is left to the beneficiary after the death of the policy holder.

It’s essential to fully comprehend what you are purchasing – what the policy covers and doesn’t before going ahead. For instance, some term life policies only cover accidental death (e.g., getting hit by a bus), while other policies cover death from illness (like cancer).

This distinction can be vital because some diagnoses may make it more difficult for you to buy life insurance in the future or can make your insurance premiums costlier. But if you buy, let’s say, a 30-year-term life policy now while you’re healthy, 29 years from now, you’ll still be paying the same premium each month even if, by then your health has experienced a decline.

Now that you know how term life insurance for married couples works and the perks of choosing it, you might be wondering whether to go for joint life insurance or separate term life insurance. 

Joint Term Life Insurance for Married Couples vs. Separate Term Life Insurance for Married Couples

1. Joint life insurance

Joint life insurance covers two people under one policy. It can be difficult to find a joint policy for term life insurance, but there are options available for joint permanent life insurance. However, they reduce flexibility for the couple and may not be that much less expensive than getting a separate insurance policy on each person.

The options available for joint permanent life insurance are typically called “first-to-die” life insurance and “second-to-die” life insurance:

  • First-to-die life insurance: This policy pays and ends after the death of the first person. It doesn’t extend to the surviving spouse. The surviving spouse would then decide what to do with the money. However, this type of insurance policy might be a little challenging to find because there are very few sellers. Most joint term life insurance fall under this category.
  • Second-to-die life insurance: This type pays out after both spouses have died. It’s mostly used by wealthy couples who want to make sure their successors can cover their inheritance taxes.

Downsides of Joint Life Insurance for Married Couples

Joint life insurance coverage allows for very limited individualization. Both spouses must have the same amount and length of coverage, and the policy pays out only once. On the other hand, obtaining two term life policies means double the coverage as both policies will pay out independently.

For instance, if you obtain a 20-year term life insurance policy. With separate policies, if your spouse passes away in the tenth year, his or her policy will pay out while your policy stays active.

Although we all hope our relationship will last forever, unfortunately, that is not always the reality. Suppose one finds themselves no longer in a relationship with one’s partner for a joint life insurance policy. In that case, it may be challenging to split the joint policy into two separate ones with the same coverage. One may have to apply for life insurance coverage again and risk not qualifying for the same rate.

Another problem associated with joint first-to-die coverage is it will be difficult or more expensive for the surviving to find new coverage later in life once the initial policy has paid out.

2. Separate Term Life Insurance for Married Couples

As the name implies, separate life insurance means both you and your spouse take separate life insurance policies. This option gives you both more flexibility regarding your life insurance coverage options.

You will have individual coverage amounts, coverage duration, and respective beneficiaries for your policies if you both wish. If one of you passes, the beneficiary will get the proceeds of life insurance, and the surviving spouse’s coverage will remain. If you and your spouse purchase insurance from the same insurance company simultaneously, you may get discounts.

Finding The Best Life Insurance Company

Buying a life insurance policy can be done in minutes. The important thing is to buy one that suits your needs best. This requires due diligence. You might also be wondering how much life insurance do I need? You need to do proper research on popular insurers, speak with their representatives, and compare life insurance quotes before making your decision. 

To give you a headstart, we’ve made a list of 6 life insurance companies in Canada where you can get affordable term life insurance for married couples. This list is based on their market positions and product offerings.  They are ranked by assets in billions of dollars and offer different interactive screens that gauge how much a policy would cost based on the personal information you give. 

For term life insurance Canada:

  • Manulife Financial
  • Great-West Lifeco, Inc.
  • Sun Life Financial
  • IA Financial Group
  • RBC Insurance
  • Empire Life

Answers to Some Frequently Asked Questions on Term Life Insurance for Married Couples

Should husband and wife both have life insurance?

Generally, the answer is simply yes. Purchasing term life insurance for married couples can provide financial security, a safety net, and peace of mind for you and your spouse.

What happens to term life insurance if you don’t die?

If you live longer than your term life insurance policy, the money you have put in stays with the insurance company. These premiums paid by those who outlive their policies will mostly be used for life insurance payouts to the families of those who were not as fortunate.

Is it better to get single or joint life insurance?

A joint life policy pays out just once, leaving the surviving partner without any more cover under that policy. On the other hand, a single life insurance policy can give more protection since each partner has an individual cover.

Can you have two separate life insurance policies?

Yes, you can have multiple policies from different or even the same life insurance companies. However, if the insurance coverage you applied for is more than your situation indicates is needed, the insurance companies will likely ask why.

What is a 20 year term life insurance policy?

A 20-year term life insurance is a type of life insurance that will cover you for 20 years. The premiums paid and the coverage amount does not change during the 20 years. However, if you outlive the policy’s term, the money stays with the insurance company, and you get nothing.

Is there a joint term life insurance?

Joint term life insurance for married couples is practically permanent life insurance. As long as you continue to pay the insurance premiums, the joint life insurance stays intact. On the other hand, a term life policy ends on a selected end date. Your permanent joint life policy can accumulate a tax-deferred cash value that depending on how it is structured.

What is spouse term life?

Spouse Term Life Insurance gives a person the opportunity to buy term life insurance coverage for his or her partners.

When should you stop term life insurance?

There’s no age set as the right age to stop your term life insurance. But, some people stop their policies when they are much older and don’t have to leave a death benefit for their children.

And Voila! Marriage is a big step worth celebrating. However, life is filled with unexpected events and buying term life insurance for married couples helps you stay one step ahead. We know this is one of those products you buy and never wish to use. But it’s essential to have a safety net that would protect you just in case. 

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