Does Life Insurance Cover Your Spouse?

NEW YORK, February 1, 2023 (Newswire.com) - iQuanti: Every adult should have a life insurance policy. However, does this policy also cover your spouse if you're married? Let's explore which life insurance products can be used for couples.

Individual Life Insurance Policy

Typically, when most people purchase a life insurance policy (either term or permanent) or receive one through their employer, they get what's called a "separate individual" policy. This means that one person and one person only is insured.

Most contracts work this way because they're the most straightforward. During the application process, the life insurance company only has to analyze one individual's medical history and lifestyle characteristics when determining the applicable premium. At the same time, only one person must pass away for the life insurance company to pay the death benefit.

Joint Life Insurance Policy

If two or more people (such as a married couple) would like to be covered by the same life insurance policy, then what they need to pursue is what is called a "joint life" or "dual life" insurance policy. 

Joint life policies are offered in one of two ways:

• A first-to-die policy. This is where the death benefit will be paid out after one of the spouses passes away.
• A second-to-die policy. Also called a survivorship policy, this is where both spouses must pass away before the beneficiaries receive the death benefit.

There can be pros and cons to getting a joint life policy. The main reason to pursue one is that this type of insurance can be cheaper than getting two separate life insurance policies. In the case of a second-to-die policy, this also gives the surviving spouse the flexibility to delay receiving benefits and alter the beneficiaries as needed.

On the other hand, joint life policies can be a little more complex than individual life insurance. For instance, with a first-to-die policy, if the surviving spouse takes the full death benefit, there will be no more death benefit to pay out to any other beneficiaries. Therefore, the surviving spouse would need to reapply for a new policy but may find it challenging to qualify based on their current age and health condition.

Alternative: A Spousal Rider

Another way couples can insure one another without paying for two separate policies is to simply purchase a spousal rider. A rider is an add-on policy to an individual life insurance contract where the primary insured adds additional coverage for other dependents (such as the children).

This type of arrangement works well for situations where one spouse works and the other is a stay-at-home parent. The working spouse would purchase the life insurance contract and become the primary insured. They could then get a spousal rider that would provide a smaller death benefit for the stay-at-home parent. 

Riders are typically very cheap, easy to add, and don't require medical exams. However, they are limited in how much death benefit they can provide, usually just enough to cover funeral costs. The rider is only good for as long as the primary is living and the policy is in effect. When shopping around for term life quotes, ask about riders and weigh this option against an individual or joint life policy.

The Bottom Line

Most life insurance policies are for individuals and only cover one person. However, couples can purchase joint life insurance if they want one insurance policy that covers both people. If one spouse already has insurance, another alternative can be adding a spousal rider to the existing policy.