In this era, many couples share their income for running the household. However, there are concerns about how a single person can manage the family if their partner dies or divorces. The best way to counter this risk is to go with life insurance.
What Is Spouse Life Insurance?
It is one method to ensure that the other partner receives some benefit to overcome their financial difficulties if one of the partners passes away. Several times one of the spouses provides household services. However, you can use the death benefit to hire people for assistance if they pass away.
Why Should I Buy Spouse Life Insurance?
The services and income that spouses contribute to the household are massive. Therefore, life insurance can replace the lost income and help in the following ways:
- It is an income replacement because it pays for the income lost due to the spouse’s death.
- It serves as a replacement for household services too. When the primary care spouse passes away, the partner will have to shoulder all the responsibilities or hire third parties to take care of various household services. Well, spouse life insurance takes care of such issues.
- Both spouses might share responsibilities for debts and retirement plans. Therefore, if one passes away, spouse life insurance can take care of it.
If you don’t have a high income, you should consider going for it. However, if you have a good income, it’s still better to go for life insurance because it eliminates the need to sell assets that might be interest-bearing and for future use.
How to Buy Spouse Life Insurance?
- You can get group life insurance through your employer at a heavy discount or even free. The prime benefit is that there is minimum underwriting, and it is a guaranteed issue which means it doesn’t consider your health.
- Commonly, companies can allow employers to add their spouses to group life insurance policies. This is known as a spousal rider. However, you have a limit to purchase coverage for your spouse.
- You can purchase insurance in the open market, and it makes sense because you can’t carry your group life insurance that your employer offers you.
- Most couples purchase separate life insurance policies because they don’t want to accept risks with a spousal rider.
- Joint life insurance covers two people, but it is not cheap. It is generally permanent life insurance that builds cash value, and most of them can allow you to add riders.
Separate life insurance is most common, but joint insurance policies can sometimes be a better solution. Joint policies can be cheaper sometimes, but they are mostly for married couples. However, you have first-to-die or second-to-die options to consider. If you want your spouse to receive the benefit, then first-to-die is the best option. However, if you want someone other than your spouse to receive benefits, you should go for a second-to-die.
Steps To Follow When Buying Spouse Life Insurance
Term life insurance tends to be cheaper than whole life because the latter has a high premium. No insurance can cost you less than term life insurance. Moreover, whole-life insurance is permanent, and it stays in effect as long as you pay premiums. It also uses a portion of your premium to build cash value over time, and you can access it through withdrawals or policy loans. Nonetheless, the couple’s needs will be the best determinant for the type of policy. There are several types to follow when buying such insurance, and they are as follows:
- Determine how much insurance coverage you need.
- You should decide which insurance you need: term-life or whole-life.
- Determine whether you need a medical exam.
- Select your beneficiary.
Multiple companies offer spouse life insurance. So, what are you waiting for? Secure your future and purchase a policy.