What Is The Difference Between Spouse Life Insurance And Life Insurance?
Spouse life insurance is life insurance coverage purchased for a spouse or partner. It differs from traditional life insurance plans in that you don’t purchase the policy yourself. It’s purchased by your partner or spouse, who is usually the primary beneficiary.
| Spouse Life Insurance | Life Insurance |
|---|---|
| Provides coverage for spouse or partner | Provides coverage for individual |
| May provide lower coverage than individual policies | May provide higher coverage than spouse policies |
| Purchased by partner or spouse | Purchased by individual |
| May be a rider added to individual policy | May be term or permanent life insurance |
| May be first-to-die joint policy | May be joint policy or individual policy |
Before buying a policy, you’ll need to decide whether you want term or permanent life insurance and the amount of coverage you need. During the purchase process, you’ll go through underwriting steps to assess your spouse’s risk profile. Premiums are then assigned and must be paid according to contractual terms. As long as premiums are paid, coverage continues until the end of the term, if applicable, or until your spouse passes away. If your spouse dies during the effective coverage period, a death benefit is paid to the named beneficiary. If your spouse outlives the coverage period of a term plan, the policy expires and benefits are lost.
Although many households only opt to purchase life insurance coverage for the family’s primary breadwinner, arguments may be made for insuring both husband and wife. Ultimately, the decision of whether to purchase life insurance for one or both spouses should be based on the personal, financial and budgetary needs of your household.
Most insurance companies offer joint life insurance options. In most cases, these policies are only available to married couples or those in a domestic partnership. Joint policies may be less expensive to purchase than separate individual coverage. They may also be an ideal way to secure coverage if one spouse has difficulty qualifying for an individual policy. However, joint policies are typically less flexible than individual plans and don’t offer the same level of customization. Most insurance companies offer two types of joint life plans: first-to-die and second-to-die.
It is illegal to purchase life insurance coverage for your spouse without their knowledge. If you plan to purchase a life insurance policy on another person, you must get their consent and their signature must appear on the policy. Signing on their behalf, even if they’ve given you verbal permission, is considered insurance fraud and may have serious legal consequences.
