Spouse Life Insurance

Shawn Plummer

CEO, The Annuity Expert

Spouse life insurance is a form of life insurance that covers an individual’s partner or spouse. For example, suppose you are the named beneficiary of a spouse’s life insurance policy, and their death results in financial loss to you and your family. In that case, you will likely get the money from their life insurance policy payout.

How Does Spousal Life Insurance Work?

Understanding how spousal life insurance operates is paramount. Typically, one spouse purchases a policy, naming the other as the beneficiary. Upon the unfortunate event of death, the surviving spouse receives a death benefit, a tax-free lump sum meant to alleviate financial burdens and maintain the standard of living.

Whether you’re exploring insurance for a husband or a wife, it’s crucial to consider the unique financial and emotional aspects that each spouse brings into the relationship.

  • For a Working Spouse: The loss of a working spouse can significantly impact the financial stability of the surviving partner. Thus, a robust policy ensures that the surviving spouse can manage debts, household expenses, and future financial obligations.
  • For a Non-Working Spouse: Often underestimated, the demise of a non-working spouse brings forth financial implications such as childcare and household management costs. Insurance ensures the working spouse can navigate such financial challenges without compromise.
Life Insurance For Spouse

Why Purchase Life Insurance On Your Spouse

  • Income Replacement – Most family members work to provide money for living expenses. This includes mortgage or rent, standard living costs, and debt payments. People also save money for college tuition and their retirement.
  • Household Services Replacement – Usually, when a couple has children, they do household tasks, or one of the spouses does most of the chores. If one spouse dies, the other must do all the chores themselves or hire someone to do it for them. This includes taking care of kids, getting them to and from school and daycare, providing meals, doing laundry, etc.
  • Planning for College, Debt, and Retirement – When two people share income, they usually share expenses too. For example, most couples will both make sure the other person can pay the mortgage and car loans if one of them dies. And when one spouse dies, the other is responsible for the family’s debt and future costs, like college and retirement. This is true even if only one person works. That’s why you should always consider getting life insurance for your spouse from day one.

3 Ways to Purchase Life insurance for your spouse

  • Through Your Employer: This method is often straightforward and hassle-free but may not offer the depth of coverage and customization you might desire. Assessing the offered coverage meticulously ensures it aligns with your needs.
  • Through a Spousal Rider: While a convenient and often economical option, it’s crucial to note that the coverage is inherently tied to the primary policy, and any changes will also affect the rider.
  • Life Insurance Marketplace: This method offers the most extensive options, allowing for high customization. However, it demands a more proactive approach to research, comparison, and policy management.
MethodDescription & How it WorksProsCons
Through Your EmployerOften, employers offer life insurance as a part of the benefits package, which may allow you to add spousal coverage.• Often more accessible and may not require a medical exam.
• Premiums can be deducted directly from payroll.
• Coverage may be limited and not tailored to your needs.
• If you change jobs, continuity of coverage can be an issue.
Through a Spousal RiderAdding a spousal rider to your existing life insurance policy extends coverage to your spouse.• Convenient and potentially more affordable than separate policies.
• Simplifies management with a single policy and premium payment.
• The coverage and terms are typically identical for both spouses, offering less flexibility.
• If the primary policy is terminated, the rider is also discontinued.
Life Insurance MarketplacePurchasing a policy through a life insurance marketplace allows you to explore various options from different providers.• Access to a wide range of options and providers.
• Ability to tailor coverage to specific needs.
• Can be overwhelming due to the multitude of options.
• May require more effort in terms of research and application processes.

Related Reading: what is spouse life insurance through an employer

Spousal Life Insurance Products

Product TypeHow it WorksDifferences & Unique Features
Individual Policy PurchaseOne spouse purchases a policy, naming the other as the beneficiary.Provides immediate financial relief upon the first death without subsequent payouts.
Spousal Rider AdditionA spousal rider is added to an existing policy, extending coverage to the spouse.Generally more affordable and convenient than two separate policies.
Joint Life Insurance PolicyA single policy covers both spouses, paying out upon the first death.Simplifies management; typically ceases after the first spouse passes away.
First-to-Die Life Insurance PolicyPays out upon the first spouse’s death, supporting the surviving spouse.Provides immediate financial relief upon the first death, without subsequent payouts.
Survivorship (Second-to-Die) Life InsurancePays out only after both spouses have passed away, typically benefiting heirs.Aims to provide financial support to heirs, rather than the surviving spouse.

Additional Notes:

  • Individual Policy Purchase: Offers the most flexibility in terms of policy terms, coverage amount, and beneficiaries, but may come with higher premiums.
  • Spousal Rider Addition: A cost-effective way to ensure both spouses are covered, albeit with the same policy terms.
  • Joint Life Insurance Policy: Offers administrative simplicity and potentially lower premiums but lacks the flexibility of separate policies.
  • First-to-Die Life Insurance Policy: Ensures the surviving spouse has immediate financial support but does not offer further payouts.
  • Survivorship (Second-to-Die) Life Insurance: Primarily aimed at safeguarding the financial interests of heirs, ensuring estate or inheritance taxes, and other financial obligations are managed without burdening them.

Each product type caters to varied needs and financial contexts, and choosing between them should be guided by a thorough understanding of your collective financial landscape, future aspirations, and potential contingencies.

Best Companies For Spousal Life Insurance

  • AIG: Allows a stay-at-home spouse to purchase up to $1,500,000 of the working spouse’s coverage.
  • Lincoln Financial: Allows a spouse who does not work to get coverage up to the same amount as the working spouse.
  • Pacific Life: Allows a stay-at-home spouse to purchase up to 100 percent of the working spouse’s policy. The limit is $3 million for people 70 years old or younger.
  • Principal: Allows a stay-at-home spouse to purchase up to $1,000,000 of the working spouse’s coverage or up to $2,000,000 with extended terms and conditions.
  • Prudential Life Insurance: A stay-at-home spouse can purchase up to 100% of the working spouse’s coverage. The maximum coverage will be considered on a case-by-case basis.
  • Mutual of Omaha: This allows a stay-at-home spouse to purchase coverage equal to the working spouse’s coverage, but there is a limit of $2,000,000.

Key Steps in Buying Spouse Life Insurance

Determine Insurance Needs

  • Assess the life insurance coverage needed based on your financial circumstances and future considerations.
  • Consider potential financial gaps that might arise in unfortunate events and plan accordingly.

Select the Type of Insurance

  • Term Insurance: Temporary and typically more affordable, but without a cash value return upon term completion.
  • Whole Life Insurance: The Pricier provides lifelong coverage and accumulates a cash value, acting as a potential asset.

Evaluate Medical Exam Necessity

  • Some policies may not require a medical exam due to technological advancements and access to health databases like the MIB.
  • Understand the terms and conditions related to the medical exam requirements or exemptions.

Choose a Beneficiary

  • Decide who will receive the death benefit, such as a spouse, children, or a charity.
  • Ensure the beneficiary aligns with your insurance objectives, and remember to update it as life circumstances change.
  • Consider assigning contingent beneficiaries as a precautionary measure.
What Is Spouse Life Insurance

Spouse Life Insurance: Conclusion

Embarking on the journey of spousal life insurance is not merely a financial decision but a testament to the foresight and care embedded in a partnership. It’s about ensuring that your spouse, whether a husband or a wife, can navigate through life’s uncertainties with financial assurance and emotional peace.

Need Help Getting Life Insurance Coverage?

Contact us if you need help purchasing a life insurance policy. The service is free of charge.

Life Insurance Inquiry

Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed insurance agent and annuity broker with over a decade of first-hand experience. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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