How To Choose The Best Life Insurance For Couples in Australia

Published: February 26, 2018

No matter what relationship stage you’re in or the type of couple you are, it’s important to check whether your current life insurance is still sufficient.

As a couple, you should do an annual review of your insurance policies to make sure it continues to provide adequate coverage, especially if there have been some recent changes to your life. For example, maybe you’ve gotten married, started a family or are nearing retirement age or perhaps you’re busy getting a divorce.

Couples life insurance in Australia isn’t for everyone. First, check whether you and your partner would benefit from joint cover or if separate life insurance policies would be a better fit. In this article you’ll discover:

What is life insurance for married couples?

Life insurance for married couples, also known as a joint life insurance plan, offers you the opportunity to cover yourself and your spouse under one policy. This type life insurance might be a good way to start planning for your financial security because you can name each other as the beneficiary, thus providing financial support to the remaining spouse should one pass away.

However, before making a purchase get a variety of life insurance quotes for married couples from Australia’s leading life insurance companies and compare price, features and benefits.

Policy Maximum Cover Maximum Entry Age Expiry Age  
NobleOak Direct Life Insurance AIA
$15,000,000
69
99
Protect your family with Life Insurance and pay on average 20%* less when compared with other insurers. T & Cs apply. Consider the PDS. Issuer is NobleOak Life Limited ABN 85087648708. AFSL 247302.

7 Things to consider before purchasing life insurance for couples

The right life insurance policy can do more than directly replace your or your partner's income in a worst case scenario. Having couples insurance regardless of income contribution makes sure you're both covered and able to maintain your quality of life.

People might have a tendency to undervalue the contribution of others, but take the time to put a dollar value on everything you or your partner does for your family. Only then can you decide whether life insurance is right for either one or both of you.

  • Income Levels

    You need to consider the differences between you and your partner’s income versus your combined expenses. For instance, if both partners earn a similar income then a similar level of cover for both of you might be sufficient to ensure financial stability if one partner dies.However, if you are the breadwinner or earn a much higher salary than your partner, you should have a larger sum insured to provide financial stability to your partner should you die.

  • Family Responsibility

    There are several situations where it makes sense for both partners to have life insurance policies for the financial well-being of the entire family, even if it's only just the two of you.

    You both support the family, even though it may be in different ways. One partner may be the breadwinner, heading off to work every morning to ensure the family can afford groceries, the mortgage etc. While the other partner may be a stay at home parent, spending hours maintaining the home and looking after children.

    Both roles are equally important and every responsibility you and your partner manage has a dollar value. If either of you were to suddenly die, it would be financially devastating.

  • The Stay-at-Home Spouse

    The dollar value of managing the home and caring for the kids is quite high if that particular spouse were to pass away.

    You would possibly need to hire a nanny, pay for babysitters or day care, or find other child rearing options to make sure your children's routine was kept as stable as possible. The same is true of cooking, cleaning, yard work, or anything else you couldn't do alone while still bringing in your own income.

    A life insurance policy for a non-working partner will help the surviving family members account for those potential increased costs of living.

  • Naming Each Other as Beneficiaries

    While most couples nominate each other as the beneficiary to receive the benefit payout, you also need to consider what would happens if you both were to die at the same time.

    Some insurers may allow you to name your partner as the primary beneficiary and another person as your contingency beneficiary. If you and your partner, who is also the primary beneficiary, both die at the same time, and the life insurer will pay the death benefit out to the contingency beneficiary.

    While we all believe marriage is forever, you need to make provisions in your life insurance contract for the possibility of divorce.

  • Risk of Serious Illness or Injury

    If either of you has a family history of serious illness or life-changing medical conditions or takes part in activities that increase your chances of serious injury, a life insurance policy would be appropriate regardless of what your income is.

    You also have the option to add on TPD insurance to your death benefit, which would pay out if you became totally and permanently disabled. Without it, that disability could put a huge financial burden on the rest of the family.

    Even if you're the sole provider and your stay-at-home spouse became permanently disabled, you need to determine if your income would be enough to cover the family's everyday bills, and pay for the increased medical expenses without some help.

  • Own Property Together

    When you buy property together, you might have to pay a monthly mortgage for up to 30 years. If one of you were to suddenly pass away, a life insurance policy payout could help your partner keep up with these mortgage payments. This will allow them to keep living in the house you bought together.

  • Your Children

    If you have children, you need to consider the real value of the contribution that both partners make to the household. For starters, if the sole earner passes away, the stay-at-home parent may have to get a job to earn an income for the family.

    Alternatively, if the stay at home partner dies, then the responsibilities of caring for your children (including cooking, cleaning, and generally looking after the children) and home falls to the person responsible for earning the household income.

    Would either of you be able to cope in this situation without the financial assistance that life insurance can provide?

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Should I have single or joint life insurance?

Before you decide to buy a joint life insurance policy consider the pros and cons.

Single life insurance: Covers one person and pays the lump sum to the named beneficiary.

Joint life insurance: Covers two people together and a lump sum is paid out to the named beneficiary.

Pros and cons of joint life insurance

Pros Cons
Can be cheaper than paying for two single life cover policies. You might not be able choose different cover amounts for each person on the policy.
Joint life insurance discounts. You may be able to receive a joint policy discount of about 5 – 10%, depending on your insurer. There is might be more admin involved when changing your policy, because both persons signatures will be needed.
If you both earn a similar salary, then a joint policy can cover each of your dollar value contributions to your life as a couple and the payout might be sufficient. If your relationship ends, for example in divorce, you can’t split the policy. You will have to decide whether to cancel the policy or transfer ownership wherein one will keep the policy and the other will need to find a new life insurance policy.
The claim process might be simpler and more convenient. If a claim has been approved by the insurer, the payout is generally made to the remaining partner if named as the beneficiary. There could be issues over who is entitled to the payout if the relationship ends and the policy is kept active.

Life insurance for different relationship types

Each type of couple will want to choose a life insurance policy to suite their specific circumstances. That’s why it’s important to consider the type of relationship you’re in before purchasing a life insurance policy.

Life insurance for unmarried couples

Unmarried couples should look at their lives in the same way that married couples do and purchase cover that will provide them and their loved ones with the necessary financial support.

Can unmarried couples get life insurance?

Yes, unmarried couples in a de facto relationship can get couples life insurance, however, whether they should or not depends on their specific requirements.

A de facto relationship usually means that while you aren’t married to your partner, you are living together in a genuine domestic couple. Meaning one of the following should be true:

  • They have been together for at least 2 years.
  • There is a child as a result of the relationship.
  • The relationship is registered under state or territory law.

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Life insurance for young married couples

A young couple, recently married, generally needs much more term life insurance than a middle-aged couple. The amount of insurance you need diminishes as your savings and retirement funds build up. Thus a spouse passing away at a young age causes many years of lost income potential.

As a newly married couple, you’re probably excited to start building your life together. This typically includes taking out a mortgage, setting up retirement plans, investing in your home, and daily combined expenses. If one of you were to suddenly die, life insurance will help your young spouse pay for shared expenses, outstanding debts, funeral fees, and the general cost of living.

What's the benefit of taking out cover at a younger age for couples?

When it comes to life insurance, the younger you are the cheaper your premiums are likely to be because younger people tend to be a lower risk to life insurers because of their reduced risk of claiming on health-related diseases.

Life insurance for gay couples

Providing financial security to your significant other if you were to die unexpectedly is essential for any couple. In 2008, federal government reforms granted gay couples the same rights as unmarried de facto opposite-sex couples, thereby allowing same-sex couples to get the same life insurance opportunities as unmarried couples, like purchasing a couples life insurance policy.

Life insurance for married couples over 50

Older couples should continue to review their life insurance policies to ensure it remains relevant to their advanced stage of life. For instance, as a senior couple, it’s likely that your dependent children will have left home and that your mortgage is nearly paid off. Factors such as these might lead you to reduce your cover amount and thus allow for more affordable premiums. Which might be very important when living on a pensioner’s budget.

Frequently Asked Questions

When do most people take out life insurance?

People generally purchase life insurance for different reasons and at different stages of life. While, most people get life insurance when they get married or have kids, many want life cover because they:

  • Have a family and want to make sure their loved ones will be financially protected should they pass away.
  • Have outstanding debts, like mortgage payments.
  • Insufficient retirement savings, and investments.
  • Need income protection or TPD cover to support them should they be unable to work for a specified period of time due to injury or illness.
  • Want critical illness cover because of their family medical history.

What are the implications to couples life insurance when getting divorced?

If you and your partner take out joint life insurance and get divorced, you have three options available to you.

  1. Keep the policy and decide who will pay the premiums.
  2. Cancel the policy so that you can each buy your own single life cover.
  3. Transfer ownership to either you or your ex. This can be slightly more complicated as you will have to work out what the person who is no longer covered by the policy is owed.

Should unmarried couples consider life insurance?

Every couple should consider life insurance, whether they are married or unmarried. Think about what would happen to your savings and children if one of you were to pass away. Usually, every person can benefit from life insurance, but whether you purchase a joint or singles life insurance policy is up to you.

How to get life insurance for couples online?

Life insurance is a way to provide your loved ones and dependents with financial security when you die. Compare life insurance quotes from top insurers in Australia when completing the quote form above and review their premiums, features and benefits side-by-side in less than 60 seconds.

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