Why Purchase Life Insurance On Your Spouse
When you think about the income and services your spouse provides, it can be hard to figure out how you would finance replacing that income or paying for those services if something happened to your spouse.
- Income Replacement Most family members work to provide money for living expenses. This includes mortgage or rent, normal 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, and many other things.
- 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 familys debt and future costs, like college and retirement. This is true even if only one person works. Thats why you should always consider getting life insurance for your spouse from day one.
What Is Voluntary Life Insurance
Voluntary life insurance is a financial protection plan that provides a cash benefit to a beneficiary upon the death of the insured. Its an optional benefit offered by employers. The employee pays a monthly premium in exchange for the insurers guarantee of payment upon the insureds death.
Can You Cash In A Paid
If you take the reduced paid-up insurance option, then decide later that you no longer need the policy at all, you could surrender the life insurance policy. Youd have no death benefit to leave behind since the policy would terminate. But youd be free to use its surrender value, which is the cash value minus any surrender fees, as you see fit.
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How Do A Will And Life Insurance Work Together
Life insurance can be essential for supporting your family when youre gone. But its not the only puzzle piece, says Strauss. A will helps protect your familys financial future by helping to ensure that your estate is properly managed, she explains. It can also simplify the transfer of your assets to your heirs, adds Hales.
Life insurance has unique benefits. Its paid directly to your beneficiaries and is typically exempt from creditors and, often, taxes too. It can provide financial support to your loved ones much more quickly than waiting for assets from your estate to be distributed.
If your beneficiaries are also deceased, or if you didnt name a beneficiary, your life insurance will be paid to your estate. When this happens, its distributed through your will and may be subject to estate taxes. And creditors can claim it to cover debts.
Coordinating your will and life insurance policy and keeping them up to date may help you rest easy, knowing your family can be taken care of.
Do you know the difference between term and whole life insurance? Get the information you need by calling a licensed insurance agent today at .
What Is The Difference Between Annuities And Life Insurance
The difference between annuities and life insurance is in their purpose. Annuities are meant to replace or supplement your income during retirement, while life insurance gives your beneficiaries money when you pass away to help them with expenses.
Because annuities give you guaranteed income after you retire, they are best bought later in life, either prior to retirement or even during it. On the other hand, life insurance gives your beneficiaries the death benefit after you pass away, which makes it something to purchase early in adulthood.
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What Is Voluntary Spouse Life Insurance
Voluntary spouse life insurance is a financial protection plan that provides a cash benefit to a spousal beneficiary upon the insureds death. The employee pays monthly for this plan, and in exchange for this, there will be money given to their spouse if they die.
If the employer offers it as a benefit, it is cheaper than going out and buying individual life insurance. However, the coverage does not follow the employee if they leave the company.
Whole Life Vs Term Life Definition: Know The Difference
There are two main types of life insurance: term life and permanent life, with whole life being a popular type of permanent insurance. By navigating the nuances of whole life vs term life, youll be able to better decide whats best for your loved ones needs. What Is Better: Term Life or Whole Life Insurance?
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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina.He has also earned an MFA in screenwriting from Chapman Univer…
Written byJeffrey JohnsonInsurance Lawyer
Benjamin Carr was a licensed insurance agent in Georgia and has two years’ experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms literally on the frontline of journalism.
Former Licensed Life Insurance Agent
What Type Of Life Insurance Policy Is Best For Married Couples
The best life insurance for families depends on the familys income and needs. Term life insurance policies may be the best option for young married couples. Each individual gets their own policy, or they can get a joint policy for a lower premium. Permanent life insurance policies may be best for married couples who are older. The life insurance is guaranteed, and the cash value can help with college bills or paying down a mortgage.
Term life insurance is the most affordable but only provides protection for a limited time. Permanent life insurance provides protection indefinitely, but it can be costly. Married couples can buy separate life insurance policies or a joint policy. There is no one-size-fits-all life policy.
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Should Both Spouses Have Life Insurance
In short, the answer is yes. Whether or not your spouse contributes to the household income, it is probably a good idea to take out a life insurance policy for them.
These days, generally both partners work to support a familyâs expense. If you and your spouse depend on each otherâs salary, either to pay off the mortgage or for other living expenses, you would need extra financial support were they to pass away unexpectedly. Therefore, buying coverage for both of you makes sense.
If your spouse is responsible for taking care of young children and running the household, it is just as important to have them covered, as it would be if they had a full-time job. Should the unthinkable happen, you would need to pay someone to perform the tasks your partner does for free. This will put additional financial pressure on you.
Here are some numbers to demonstrate this point.
The average hourly rate for a nanny in Canada ranges from $15-$20. This translates to at least $600 a week or over $31,000 a year. If you multiply the child-care expense over several years, it becomes clear why buying coverage for a stay-at-home parent is a smart decision.
Determine If A Medical Exam Is Needed
Today, many insurance companies offer life insurance without a medical exam. However, this does not mean they are accepting a risk because technology has made it possible to learn about your current and historical health by accessing a national database known as the MIB.
Many life insurance policies dont require a medical exam.
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Income Plus Anticipated Expenses
Adequate insurance coverage often needs to go beyond simple income replacement, as shown in these two very real situations. Family insurance coverage should take into account the financial and non-financial contributions of both spouses and anticipate the new expenses faced by the surviving parent/spouse.
Child care and housekeeping are significant ongoing expenses that can be anticipated and included in your insurance planning. Let GEBAs Licensed Insurance and Financial Consultants help you work through these issues and design a plan tailored to your familys unique situation.
Enjoy the peace of mind that comes from knowing that you have helped to provide for your familys financial well-being in the event that you or your spouse passes away unexpectedly.
* Child care costs in the United States, Maryland. Economic Policy Institute from .
How Does Joint Life Insurance Work
Most joint policies are permanent life insurance policies, which last your entire life and have an investment-like cash value feature that earns interest. Joint term life insurance policies, which expire after a set period, do exist but are less common.
First-to-die joint policies are usually best for people with expenses supported by one spouse people with large debts, like a mortgage or young families. First-to-die life insurance is the closest option youll find to an individual life insurance policy. It helps the surviving spouse cover expenses after the loss of the financial support provided by the spouse who passed away.
Second-to-die policies pay out the death benefit only after both policyholders die, so its not intended to replace family household income. Second-to-die policies are best for couples who intend to use the policy proceeds as part of a estate planning portfolio the cash value can be used to cover estate taxes, leave a nest egg for the couples heirs, or pay inheritance taxes.
A policy that covers both spouses can be a good option in very specific scenarios. Most couples, however, will benefit from purchasing two separate individual life insurance policies.
The best life insurance for married couples and domestic partners will depend on the individual circumstances, so you should talk to a licensed expert about whether separate policies or a joint policy is right for you and your spouse.
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Is Supplemental Life Insurance Worth It
Like any insurance decision, supplemental life insurance is worth it in many situations, but you must look at your finances. Should something happen to your spouse or child, do you have enough money saved, or would it put you in a financial bind?
If youâd suffer financially if either passed away unexpectedly, protect your family today. For a slightly higher premium, you could have the peace of mind you need to take care of your family financially.
No one likes to think of the unexpected, but life happens, and we must be prepared. Find the best supplemental life insurance policy for your spouse or child and cover yourself today.
Can You Borrow From Voluntary Life Insurance
Borrowing from your life insurance policy can be a quick and easy way to get cash in hand when you need it. You can only borrow against a permanent or whole life insurance policy. Policy loans are borrowed against the death benefit, and the insurance company uses the policy as collateral for the loan.
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Supplemental Life Insurance Costs
You pay the premiums for Supplemental Life Insurance coverage. Costs for employee and spouse/domestic partner life insurance are based on the covered individuals age and coverage level chosen. Costs for dependent child coverage are based on the coverage level you select only.
Voluntary Supplemental Employee & Spouse/Domestic Partner Life Premiums
What Is Domestic Partner Life Insurance
As a domestic partnership, you have the same needs married couples do when it comes to the financial security that term life insurance provides. A term life insurance policy can provide funds to take care of your outstanding debts, funeral and burial expenses, and provide for your loved ones for years to come.
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Can You Have 2 Life Insurance Policies
The short answer is yes. You can have more than one life insurance policy, and you don’t have to get them from the same company. … Because buying multiple policies can help you make sure you have enough coverage to meet the needs of your loved ones, for as long as they need protection, at a price you can afford.
Dependent Life Insurance For Children Link
You can purchase life insurance coverage for your eligible unmarried dependent child under the age of 26 in the amount of $10,000, provided they are dependent upon you for support and maintenance. Disabled children over age 26 may be eligible for continued coverage, if they were disabled prior to their 26th birthday, were previously enrolled in coverage and MetLife approves the application. Contact to request the application, which must be completed by you and your childs physician.
Coverage on your child cannot exceed the amount of your combined basic and supplemental life coverage. A MetLife Statement of Health is not required to purchase this coverage. You are automatically the beneficiary of your life insurance coverage for your child.
Please note the following:
- If you and your spouse/same-sex domestic partner are Syracuse University employees, you both may purchase coverage on the same child and you both would receive a benefit payment should a child pass away.
- Your eligible dependent cannot also be eligible for coverage as a University employee.
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Life Insurance Administered By Securian
Purdue University provides term coverage for employees with the option to increase your coverage.
When making decisions for your life insurance coverage, visit the Purdue University Securian webpage to get information on
- Purdue University Plan Summaries
- Resources for term life, AD& D and Evidence of insurability process
- Educational videos
- Life insurance options after retirement
- Financial Planning tools
- Additional benefits included with Securian
Considerations Before Buying Life Insurance
Research policy options and company reviews. Because life insurance policies are a major expense and commitment, it’s critical to do proper due diligence to make sure the company you choose has a solid track record and financial strength, given that your heirs may not receive any death benefit for many decades into the future. Investopedia has evaluated scores of companies that offer all different types of insurance and rated the best in numerous categories.
Life insurance can be a prudent financial tool to hedge your bets and provide protection for your loved ones in case of death should you die while the policy is in force. However, there are situations in which it makes less sensesuch as buying too much or insuring those whose income doesn’t need to be replaced. So it’s important to consider the following.
What expenses couldn’t be met if you died? If your spouse has a high income and you don’t have any children, maybe it’s not warranted. It is still essential to consider the impact of your potential death on a spouse and consider how much financial support they would need to grieve without worrying about returning to work before theyre ready. However, if both spouses’ income is necessary to maintain a desired lifestyle or meet financial commitments, then both spouses may need separate life insurance coverage.
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Types Of Supplemental Life Insurance
Here are the most common types of supplemental life insurance options that people like to add on their existing life insurance policies.
Accidental Death and Dismemberment : This type of insurance pays out if the employee has a sudden accidental death, or is paralyzed or disabled due to the accident.
Accidental Death and Personal Loss Insurance: If the insured person is in coma for more than 30 days due to an accident caused at work, or is paralyzed or has suffered loss of speech or hearing as a result of a workplace incident, accidental death and personal loss insurance provides coverage by giving a set monthly amount to the beneficiaries. While deciding the policy, the amount is fixed and is given to the beneficiaries on a monthly basis.
Spousal/Domestic Partner Insurance: Just like an add-on to your existing life insurance policy, a spousal/domestic partner insurance gives coverage to your spouse which is a percentage of what coverage youre getting.
Burial Insurance: This is a very basic kind of supplemental insurance with a low coverage amount of up to $5,000-$10,000 to pay for funeral and burial expenses of the policyholder. Burial costs are very high in the country so many people get this supplemental insurance to pay for those.
How Does It Compare With Traditional Life Insurance
Another way to get extra coverage is by signing up for your own individual life insurance policy outside of work. There are pros and cons to this approach. With individual policies, you can pick exactly what you’d like to buy, whereas with supplemental life, your options are limited to what’s provided by your employer.
For example, a group life insurance program might only offer temporary term life insurance, but on the individual market, you could also buy permanent life insurance, which doesn’t expire and earns cash value that you can use while still alive.
Supplemental life insurance could also set a maximum limit to how much you could buy â such as between $100,000 to $1 million â whereas an individual life insurance policy could potentially allow you to qualify for more. The individual policy is yours, so you keep it even after changing jobs.
On the other hand, with individual life insurance policies, you typically need to go through health underwriting. If you have health issues, this could mean paying more for your coverage, and it’s possible you won’t qualify. Supplemental life insurance policies can also offer group discounts, so the premiums could be lower versus an individual policy.
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