If you’re married or planning to get married, the life insurance conversation needs to happen sooner rather than later. Have you had “the talk” with your spouse yet? This can sometimes get lost in the early years because there’s so much else to focus on. Jobs, kids, mortgages, and car payments are all on the priority list. Life insurance should be there too. In this article, we’ll explain why you need it and how much life insurance you should buy.

How does life insurance work?

Life insurance is a contract between the policyholder and the life insurance company. One of the terms of that contract is that the company will pay out a death benefit if the policyholder passes away while the policy is in effect.

The first decision the policyholder needs to make is who gets that benefit. That party is known as the “beneficiary.” Married couples have the option to each have their own policy or have a joint policy.

Joint life insurance policies

A joint life insurance policy is one taken out by two people, such as spouses or partners, that provides financial protection for both individuals in case of an untimely death. There are two types of joint life insurance policies.


A first-to-die policy pays the surviving spouse the life insurance benefit when their partner dies.


A “second-to-die” policy would pay out the death benefit to a beneficiary after the death of both spouses.

Factors to consider when buying life insurance

There are several factors to consider when buying life insurance, including the following:

  • Age
  • Health
  • Income
  • Number of dependent children

Life insurance is intended to replace your income, but it can also be used by your spouse and loved ones to cover expenses. You’ll want to sit down together and figure out how much debt you owe to ensure it can be paid off if one of you passes away.

Another choice you’ll need to make is whether to buy term life insurance or permanent life insurance. Term life is cheaper but has an expiration date and no cash value. Permanent life insurance, like whole or universal life, does not expire and builds cash value as you pay your premiums. That makes it an investment, not an expense.

How much life insurance is considered enough?

You can calculate the amount of life insurance you and your spouse need by adding up each of your annual incomes and any debt you owe. If you have young children, factor in their financial needs too. How much would they and your spouse need to pay their regular expenses and pay off outstanding debt if you die?

Most insurance agents recommend buying enough insurance to cover 10-12 years of lost income. If you make $100,000 per year, that’s $1 million to $1.2 million in coverage. Is that enough? You might want to compare that amount to the debt you leave behind. As a married couple, you’ll want to ensure you have enough coverage to pay that all off.

The Bottom Line

Life insurance is a contract between the policyholder and the insurance company that guarantees a beneficiary will receive a death benefit if the policyholder dies. The death benefit amount, particularly for married couples, should equal 10-12 years of income and pay off any outstanding debt. Speak to a licensed insurance agent about the best way to make sure you and your spouse are financially prepared for whatever life brings your way.





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