Most people do not even consider life insurance until they reach milestones like buying a house, getting married, or having children. However, joint life insurance for you and your partner is a smart choice even if you do not have a mortgage or the two of you are not married.
Partners tend to rely on each other financially and make plans for the future based on their shared income, shared financial commitments, and shared debt. Life insurance is a great way of protecting your partner’s financial future if something unexpected happens to you. An insurance payout helps them cope financially in the aftermath of your death and gives them time to keep up with the day-to-day expenses of your current lifestyle.
What is life insurance?
Life insurance policies pay out a tax-free lump sum to your partner if you die. Couples usually have a lot of shared financial interests and if one were to suddenly pass away then the surviving partner might be left to struggle in your absence. They may need to significantly alter their lifestyle or maybe move house now they can only rely on a single income. Life insurance means they will have a financial safety net to give them time to get on track should something happen to you.
How does life insurance work?
If you buy a term policy, you pay a monthly premium for the duration of your policy term and in return, you will get a lump sum paid out in the event of your death. When taking out the policy you will need to name your beneficiary, most likely your partner.
Why is it important for couples?
Life insurance helps to support your partner’s financial needs after you die – this can be to pay off shared debts such as your mortgage or car finance, or to pay for the cost of your funeral. It can also help your loved ones to continue their daily lives and do essential things like keep a roof over their heads and keep up with household bills without your financial help.
Depending on your financial circumstances, you may want to take out a single policy to protect your partner, a policy each, or you could consider taking out a joint life insurance policy. A joint policy means that both of you will be protected if either of you dies, however it typically only provides one payout so the surviving partner will need to take out their own policy following this.
When is the best time to get life insurance?
Typically, the younger and healthier you are, the cheaper your life insurance will be. However, most people do not even consider getting a policy out until something happens that triggers a need for it such as buying a house or having children. If you are in a long-term relationship or living with your partner, whether you are paying rent or a mortgage, your partner will be affected financially by your death. So, the sooner the better.