Affordable Life Insurance Protection for Your Family
If You are Married and Considering The Purchase of a Life Insurance Policy, You May Be Wondering, Do Both Spouses Need Life Insurance?
Usually, the most common purpose of life insurance is to replace the income of a family’s main breadwinner.
However, today it is far more likely that both spouses work to support the family’s finances – to make ends meet, and it is probably a good idea that both spouses of the household have their own life insurance policies.
Even if one member of a couple is primarily a homemaker and caregiver, you should still consider buying life insurance for that spouse, because if he/she should die, you may need life insurance to help cover the cost of child care, or hiring someone to take care of the home and handle all of the thongs the homemaker did for the family including running errands, grocery shopping, cleaning, cooking, driving the children to and from school and medical and dental appointments, among other things.
The surviving spouse of a non-working partner/spouse suddenly left to deal with a grieving family may need to take time off from work to ease the emotional burden on his or her children over the loss of their parent.
Life insurance can help by providing a financial cushion so you can take time to be with your children after the passing of your spouse or partner.
Usually, a general rule of thumb for determining the amount of life insurance needed for a non-working spouse is to consider his or her annual income as if it were at least $40,000.00 per year.
Life Insurance for Both Spouses Can Be Critical for Your Family
In a partnership, duties are often relegated to a specific person. You'll do the cooking as long as they do the dishes. They'll drive the kids to school if you'll pick them up after. You'll go to work while they manage the house. None of these are great revelations; likely they are part of you and your spouse's daily routine.
And if we asked you whose half of the work was more important, you'd probably respond that both are equally important to the overall success of managing your family.
Many of us feel that neither ours nor our partner or spouse's duties are dispensable or easily replicated - that's why it's called partnership.
Even though most of us understand the importance of our stay-at-home spouse’s contribution to the family, life insurance for stay at home spouses is uncommon.
Usually, stay at home dads and moms will rely simply on their spouse's individual or group life insurance policy.
Stay at Home Spouses
Stay at home spouses provide a value to the overall household that can seem difficult to put into a monetary perspective.
However, since the work these spouses do to keep households running isn't defined by a number, but rather a feeling, it's often left out of the life insurance conversation.
Life Insurance carriers, and policyholders, think in terms of replacing the money we'd lose not the quality of life we'd be left without should a spouse die.
Here are a few reasons we think both spouses need life insurance, regardless of whether one stays at home without earning an income,, or both work and provide financial support for the family.
You Manage the Household
For stay-at-home spouse, consider the value of all that you do in the home.
Childcare costs, running errands, grocery shopping, cooking, housekeeping fees and other expenses should be taken into consideration when deciding whether you should buy life insurance for yourself and how much coverage you would need.
It's important to remember that just because you aren't earning a salary doesn't mean you don't still provide a quantifiable monetary value to the family.
Your spouse would need to pay someone to perform all of the tasks you handle on a daily basis.
You Work a Job and Support the Household
In addition to the income brought in through your jobs, both you and your spouse also likely provide additional tangible benefits to the family through the work you both do in the home.
Even if you only provide a secondary income working part-time, consider what household duties would go un-managed, or be difficult for your spouse to maintain, if something were to happen to you. If you're relying on both your salaries and the work you do around the house to make ends meet each month, then a disruption to either of your salaries would likely cause your family financial difficulties.
Life Insurance: It's Not Just for The Primary Breadwinners
When deciding to buy life insurance, a lot of people only think about protecting the primary breadwinner's income.
This makes sense... until you think about the financial impact of losing a spouse, your life partner, or even a housemate with whom you share living expenses.
A decision to buy life insurance makes sense for them as well, depending on your situation and finances.
When you are ready to buy life insurance for yourself, consider buying a life insurance policy for other members of your household for the following reasons:
Buy Life Insurance to Cover Shared Expenses - If a partner, spouse or housemate shares the mortgage or rent with you, and pays a portion of the monthly bills, are you prepared to take on all of those monthly expenses should that person die? The trauma of losing someone can be much worse if you're suddenly faced with having to move or taking on additional financial expenses each month.
Cover Hidden Expenses - A financial contribution to the household isn't always made in cash.
The support of a caregiver is often worth so much more than money.
There's also running daily errands, housekeeping, tutoring, taking the kids to their medical appointments and sporting events, all of these can amount to huge expenses if you suddenly have to pay for them, rather than being able to rely on your spouse to handle them.
Buying life insurance can prove to be a financial lifesaver.
The life insurance rates for your spouse are bound to be a fraction of the cost to hire help to replace all of the work your spouse performs on behalf of your family and household on a regular basis.
Cover Final Expenses - If your spouse dies, do you have the money set aside to cover the cost of his/her final expenses?
Final expenses may include funeral and burial expense, in addition to other related end-of-life expenses; such as, any medical bills, which can prove significant, especially if there was a long-term illness.
Buying even the most affordable life insurance policy can go a long way toward resolving these unexpected bills after the death of a spouse.
Pay the Spouse's Debts - If your spouse dies, can you pay of their debts?
Personal loans, auto loans, student debt, credit cards, and other financial obligations you may or may not have been aware of, can create an unexpected financial burden for you and your family, for many years to come.
Individual Life Insurance Policies for Each Spouse
Buying separate policies (one for each spouse) tends to be less expensive than you might expect, since you can tailor each policy to the individual’s specific needs
For example, you may want the main income-earner to have more coverage than a stay-at-home spouse.
Married couples purchasing separate life insurance policies can save time by scheduling a joint medical exam, taking care of the health check-up at the same time.
Spouses Can Shop for Life Insurance Together
After you and your spouse determine how much life insurance you need, the rest of the buying process is the same as it is for individual shoppers.
Determine How Much Life Insurance You Need as a Couple
By figuring out the right amount of life insurance and a term policy’s length (duration of coverage) that makes sense for your family, you can avoid overpaying for coverage that you don’t need.
Choose a Beneficiary of Your Policy
Most spouses shopping together for life insurance plans choose their spouse as the primary beneficiary of their policy, though you also have the option of choosing your children, or other family members.
Consider Community Property Laws of Your State
If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, or Washington, you need your spouse’s consent to name someone other than your spouse as the beneficiary of your life insurance policy.
Choose Term Life or Permanent Life Insurance
A term life insurance policy offers coverage for a specific period of time, anywhere from 5 to 30 years, while a permanent life insurance policy lasts your entire lifetime. However, permanent insurance costs up to 5-10 times more than the same amount of term life insurance.
Choose a 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 providing lower premiums for applicants with those conditions.
Can You Buy Life Insurance on Your Spouse?
Can you purchase life insurance for your spouse without their knowledge or vice versa? Not legally, your spouse must be informed.
To get a life insurance policy, the insured person must physically take the medical examination. Even with a non medical life insurance policy your spouse must sign for the policy and give consent to be insured.
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 spouse 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 (proof that you would be financially burdened upon the death of your spouse). However, spouses usually have an Insurable Interest in one another.
FAQs – Life Insurance for Both Spouses
Should Both Spouses Have Life Insurance Coverage?
If both spouses provide some level of financial support for the family, then both people should have life insurance coverage. The amount of life insurance needed for each spouse varies based on each spouse’s income or contribution to the household (such as child care or housekeeping), and outstanding individual or joint outstanding debts.
Is Life Insurance More Affordable If You are Married?
The cost of a life insurance policy isn’t affected by marital status. It depends on factors such as your health, age, tobacco use, lifestyle and gender.
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