Life insurance for young married couples

This post was first published on December 10, 2021, and was updated on July 19, 2023.

Being a young newlywed is one of the happiest, most exciting times of your life. There is so much to look forward to during this stage. Maybe you’re planning to have a family or travel the world. Maybe you’re building your dream house or taking out a loan to start an investment portfolio. Maybe you’re heading back to school to pursue some lofty career goals.

Many young married couples are so focused on the future, they forget that things don’t always go according to plan.

We hope you and your new spouse have a long, happy, healthy life together. However, while we all wish for the best in life, it’s essential to consider life insurance for couples so you’re prepared if things don’t go according to plan.

What is life insurance?

Life insurance is a financial contract between an individual (policyholder) and an insurance provider. In this contract, the policyholder agrees to pay a monthly premium to the insurance provider, and in exchange, the insurance provider agrees to pay a predetermined amount of money to your loved ones in the event of the policyholder’s death.

Is life insurance when you’re young worth it?

In short, yes. 

Life insurance is important when you’re young and old, especially for couples. Once you are married or in a long-term relationship, you begin to build a life together which often includes a shared home, vehicle, investments, loans/mortgages, and other significant expenses. If one person dies and they do not have life insurance, the other partner is left to cover these expenses on their own.

Life insurance for young married couples is typically inexpensive, as you’re likely to be healthy and unlikely to die during your working years. If you have a life insurance policy from when you were single, it’s probably too small for the needs of your new family. If you can add a rider to your current coverage, adding your partner is simple. If not, you can compare quotes on a new insurance policy.

Before you decide on a new policy, you’ll need to decide which life insurance policy type suits you best, term or whole.

Why should I buy life insurance while I’m young?

There are many benefits to getting life insurance when you’re young and healthy. Like most types of insurance, the amount you pay in premiums is directly connected to the level of risk you pose to the insurance company. 

It’s no surprise that a young, healthy person is less likely to die than someone who is older with a list of pre-existing health conditions. This means that a young, healthy person poses a lower risk to the insurance company, and therefore qualifies for lower insurance premiums.

Depending on the type of life insurance you buy, securing a lower rate when you’re young and healthy could save you a lot of money in the long run.

To understand how pricing works, check out our article on “the cost of life insurance”.

Term life insurance for married couples

Term life insurance is the simplest and probably most common type of life insurance for young married couples. You select a term, typically 10 or 20 years, within which time your partner will receive a payout if you die.

As with individuals, the premiums on term life insurance for married couples generally increase at each renewal, sometimes by a lot! If you’re healthy at your renewal date, you should re-qualify to save money – that generally just means doing a medical exam. You may also be able to save money by getting a new insurance policy all together – it pays to shop around. That said, don’t cancel existing insurance until you have new protection in place.

When buying insurance, your premiums are based on your current age. If you plan on having children, you may save by getting insurance now rather than after they’re born. Since insurance premiums are also based on your health, which is unpredictable, you may not qualify for affordable life insurance later. We have pulled together a list of ways to save on life insurance that’s worth reading too.

Can we get life insurance as a couple?

Yes, you certainly can. In fact, many life insurance providers offer policies specifically tailored to couples. These policies are often called couples' life insurance or joint life insurance, and they cover both partners under a single policy. 

This is a great way to purchase life insurance because these policies are simple to research, purchase, and manage. There are also significant tax benefits to purchasing joint life insurance policies and joint policies are often less expensive than purchasing separate policies for both spouses. 

However, joint policies offer the same amount of coverage for both partners, which may not be ideal in some situations. They also offer less flexibility than individual policies and add an additional layer of complication if your relationship ends.

Are all joint life insurance policies the same?

No. There are two main types of joint life insurance –joint first-to-die life insurance and joint last-to-die life insurance. If you’re wondering about the best life insurance policy for couples, it’s important to know your options as this will help determine the plan that suits your needs. 

With a joint first-to-die life insurance policy, the insurance provider pays a death benefit to the surviving spouse when the other spouse passes away. This is a common type of joint life insurance, because often when one spouse dies the other spouse often needs the payout to cover funeral or household expenses or replace the income of their deceased spouse.  

With a joint last-to-die policy, the death benefit is paid out once both spouses die. These funds are often used to pay off any debts the couple held or to ensure their family is not left to cover funeral costs or other expenses related to the death of the couple.

Whole life insurance for married couples

Whole or universal coverage is not a very common type of life insurance for young married couples, as it is most beneficial for high net worth individuals. Whole life insurance covers you for your entire life, so you’re guarenteed a payout one day. As a result, the premiums are much more expensive! The added benefit is the tax-saving investment component.

Unfortunately, the taxdeductions will only be worthwhile if you’re already maxing out your TFSA and RRSP contributions. You’ll need to be earing well into the six figures to be at that stage, especially while you’re young.

You can learn more about whole life insurance here, but it’s unlikely to be the right life insurance for young married couples.

Can I list my boyfriend or girlfriend on my life insurance?

If you are unmarried and purchase a policy, you can choose the life insurance beneficiary of your policy. This means you have the option to add your boyfriend or girlfriend to your life insurance policy so they will receive the benefit in the event of your death. If you choose to do this, it’s important to ensure you contact your insurance company to update this information if you ever break up. 

Married Life Insurance – other things to consider

Here are answer to some other common questions you might have.

How much married life insurance does a married couple need?

You won’t know if you have enough life insurance until you look at your new financial obligations and goals, which is more complicated in a couple. Check out our article: ‘How much life insurance do I need‘ to learn more.

Do you have cost-effective insurance?

Each insurance policy has administration charges. Buying one larger policy instead of several smaller ones puts more of your money towards protection rather than the insurance company’s overhead. Term life insurance provides the highest death benefit for the lowest cost for temporary needs. Permanent life insurance provides coverage which lasts for life and is designed to be affordable over that timeframe.

Can you get discounts?

If you and your spouse buy insurance from the same insurer at the same time, you may get discounts. If you buy more insurance, you can get volume discounts. Paying insurance premiums monthly is easier for budgeting but generally costs more than paying annually.

Do you have the right beneficiary?

When you were single, you may have designated a sibling or a parent as a beneficiary. Now that you’re married, you probably want the proceeds to go to your spouse. You can get the appropriate forms to change your beneficiary through your advisor or directly from the insurance company.

You can also specify a contingent beneficiary to receive the proceeds if your primary beneficiary dies before you. If you have children, you may want some money to go to them. If they’re minors, you’ll need a trustee. Note that you want to avoid making a beneficiary irrevocable because you then need that person’s permission to make a change.

The bottom line

While you may feel invincible as a young, married couple, unfortunately, unexpected events can occur. Learning about life insurance for couples and researching different policies to determine the best policy for you will help ensure you’re prepared for an unfortunate event.

The death of a spouse is a devastating, traumatic experience, and being left in a state of financial distress is one thing a surviving spouse should not have to worry about. While you likely won’t need to engage with your couples' life insurance policy for many, many years, securing it when you’re young gives you one less thing to worry about if the unthinkable happens.

Get started today by speaking to a life insurance broker to help determine the best option for you.

Also read:

• Can you get family life insurance in Canada?
• The best life insurance for young parents
• Can you buy life insurance for your parents?
• What’s the point of Last to Die life insurance?