You and your spouse both contribute a lot of money to your lifestyle. So, if something happens to one of you, life insurance might need to step in cover the costs of such a loss. What are some of the ways that spouses can work together to get the life insurance that’s appropriate for each person?
Term Options Exist For Couples
Many couples conclude that they only need life insurance for a certain number of years. In such cases, term life insurance can prove beneficial. These policies usually come in set terms (often 5, 10 or 20 years). In other cases, you can set these policies only to last until you reach a certain age. You can drop the coverage when the term expires.
Let's look at an example.
If you have children at home, then one parent's death might transfer strain onto them and the surviving spouse. A life insurance payout from a term policy can help alleviate this burden.
Yet, once your children grow up and move on, you and your spouse might decide you no longer need the coverage. You might have enough money to support yourselves until death. Therefore, after the term policy ends, you might simply let it go.
For spouses, different term policies often offer a couple of beneficial options.
- Joint first-to-die coverage insures both spouses under one policy. When one dies, the other will receive the payout. There are limitations, however. You usually cannot divide these policies. Furthermore, when one partner dies, the other might not be able to keep that policy. They usually will have to apply for new coverage.
- Single-term policies allow each partner to choose their own policy and coverage limits. When one spouse dies, the other’s coverage will usually remain in place. Therefore, making changes or maintaining coverage will often prove simpler.
Yet, if you want more than just a term of coverage, you have policy options that remain with you permanently. Two of the most common are whole-life and universal coverage.
- Whole-life policies last as long as you pay your premiums. These policies will accumulate cash-value and interest over time. This can help you build wealth within the policy.
- Universal life policies combine your life insurance with an investment account. The investment account will accumulate cash value, and you can often withdraw that money while you are living. By paying your premium, you contribute the cash value. Yet, the benefits might fluctuate based on market performance.
Depending on your needs as a couple, either joint or separate life insurance might prove beneficial. So, work closely with your Heritage Insurance agent to determine your needs, and how coverage will fit into your budget.