Life Insurance for Couples

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, updated on July 19th, 2023       

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Life Insurance

We’ve partnered with Compare Club to bring you a range of life insurance policies to help you compare them side by side.

As someone with a spouse or partner, it’s important to ensure that each of you is protected by an appropriate level of cover so you won’t be left to manage your finances on your own if something bad happens. However, it’s worth considering whether to take out a couples’ policy instead of single life insurance.

You can compare a range of offers right here with Savvy to help you secure the most suitable policy for you and your partner’s situation. Simply answer a few quick questions about yourself to generate instant quotes from some of Australia’s leading insurance companies. Start the process with Savvy today.

What is life insurance for couples and how does it work?

A couples’ life insurance policy (also known as a joint life insurance policy) is a type of insurance designed to cover two people. These are generally taken out by those who are living together and/or married and whose finances have become interlinked. In terms of what they cover, they’re essentially the same as any other type of life insurance, with a variety of different policies available including:

  • Life cover: pays out a lump sum benefit if someone passes away or is diagnosed with a terminal illness
  • Total and permanent disability (TPD) cover: pays out a lump sum benefit if someone becomes permanently disabled due to injury or illness and is no longer able to work
  • Trauma cover: pays out a lump sum benefit if someone is diagnosed with, or suffers from, a serious illness, such as a heart attack or cancer
  • Income protection cover: pays out an ongoing benefit worth 75% to 85% of your monthly income if you fall ill or are injured and are temporarily unable to work

In terms of what happens to your life insurance when you or your wife, husband or significant other passes away, the insured sum will be paid out to the other and coverage will cease. Should you wish to continue being covered by life insurance, you’ll need to take out a new policy.

What are the differences between single life insurance and coverage for couples in Australia?

The main alternative to purchasing a joint life insurance policy as a married couple or de facto partnership is buying two separate single policies. There are several key differences between these two options, which include the following:

  • The covered individuals: as the names suggest, life insurance for singles will only offer any coverage for the individual whose name is on the policy as an owner. In contrast, couples’ insurance can offer benefits if either member passes away or falls terminally ill.
  • How often benefits are paid out: as mentioned, couples’ life insurance pays out upon the first member of the policy’s death or terminal illness diagnosis. However, with two separate policies, benefits can be paid out for both you and your partner to your nominated beneficiaries.
  • What’s covered for each person: by taking out a joint life insurance policy, you’ll have to commit to the same level of coverage for each half of the couple. If each has a single policy, coverage can be more effectively tailored to their specific health and lifestyle needs.

Whether a joint policy or two single policies is the best option for you and your partner will depend on a range of variables, such as your respective lifestyles, health situations, employment and more. You can compare a variety of quotes from leading Australian insurers all in one place with Savvy to help you single out the best policy for you and your partner.

Types of life insurance

Why compare life insurance through Savvy?

The pros and cons of life insurance for couples

PROS

Cheaper than separate policies

Companies will typically offer discounts on their joint policies, helping you secure cheaper overall coverage by up to 5% or more compared to what you would’ve spent on two policies.

One single premium payment

Rather than having to worry about setting up multiple payments to separate life insurers on different schedules, couples’ life insurance will only require one payment each month.

Suitable for couples in similar conditions

If you and your partner are a similar age, working in similar fields and are similarly healthy (or have similar health conditions), it could be worthwhile choosing a joint policy.

CONS

Only offers one payout

Your life insurance payout and coverage will be completed once the first half of your couple passes away or falls terminally ill, which could leave the other without adequate cover thereafter.

Can be complicated by separation

Your situation could be complicated if you and your partner split while your coverage is still ongoing, meaning you'll likely have to come to an agreement.

May not be suitable for different health situations

If, for example, you and your wife take out joint life insurance and she has a pre-existing condition which you don’t, you could end up paying more for your coverage.

More common questions about couples’ life insurance

Can I cancel my joint life insurance policy if my partner and I split up?

Yes – cancelling your policy is one option if you and your partner separate or divorce. This will void your coverage and won’t offer you a refund (unless you do so during its cooling-off period). Alternatively, if you’ve taken out a term life insurance policy together which still has plenty of time to run, it may be worth working out an arrangement between each other and your insurer should a claim need to be made while you aren’t together.

Will I be able to add cover for a child to my joint life insurance policy?

Yes – most insurers will enable you to include your child or children under a couples’ life insurance policy. Some will offer automatic coverage for children in certain areas, such as a complimentary critical illness benefit, while you’ll have to add cover as an optional extra in other cases.

When should my partner and I look at buying life insurance as a couple?

The younger you are when you take out your joint life insurance policy, the cheaper your premiums will be. This is because younger people aren’t considered as high a risk of contracting serious illnesses or passing away in comparison to older people. As such, it’s one of the best ways to reduce your life insurance premiums.

What can our couples’ life insurance payout be used for?

There are no real restrictions on what your policy payout can be used for. In most cases, couples will use them to cover medical expenses which may have been accrued before the death of a partner. However, some of the areas you may wish to invest your life insurance payout include the following:

  • Home loan repayments
  • Ongoing household bills and other expenses
  • Funeral costs
  • School fees for your children

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Disclaimer:

Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.

Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.