Life Insurance for Couples in Australia: Married & Unmarried
Being a couple can have a significant impact on your life insurance needs. Whether you and your partner have recently moved in together or have been married for decades, it’s always a good idea to review your insurance coverage.
Published August 17, 2020
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In this article, we’ll look at joint life insurance compared to separate policies and which option may best suit you at different stages of your life.
What is couples’ life insurance?
Life insurance for couples generally refers to a type of insurance that protects two people in a relationship that live together, providing financial security to you and your partner should one of you pass away. Couples looking to lower the cost of their life insurance may want to consider a joint life insurance policy, or 2 separate policies from the same insurer.
Buying life cover a couple is a good way to protect your financial futures when on a tight budget because of the couple’s life insurance discounts available from select life insurance companies.
What is a joint life insurance policy?
Joint life insurance policies in Australia are designed to enable two people in a committed relationship, married or unmarried, to share one life insurance plan.
While there are advantages to joint polices there can also be some disadvantages, compared to separate policies with the same insurer.
Single policy life cover vs joint life insurance
| 2 Separate policies from the same insurer | Joint life insurance |
| Two single policies, each with its own policyholder, covering a single life. | A single policy with two Policyholders, covering two lives. |
| Two separate policies may take a bit longer to organise as each policy will be based on your respective requirements. | More straightforward to arrange than two separate policies because you and your partner will usually be protected by a single plan on the same terms and conditions. |
| Some insurers provide multi-life discounts when you have separate policies with the same insurer under the same product series. | Premiums are generally lower than individual policies. |
| Each policyholder can make changes to their policy without consent from their partner. | Changing the policy, for example, adding benefits or upgrading the cover amount will require signatures from both policy holders. |
What is the best term life insurance for couples?
There is no ‘one’ specific life insurance policy that’s suited to all couples. The type and amount of cover you choose will generally be dependent on:
- Your age
- Your combined income
- Whether you have children
- Your health and smoking status
- Joint expenses and debts
- Whether one is a stay-at-home spouse
- Your occupation and lifestyle
Couples life insurance considerations at different stages of your life
| Stage of life | Insurance Consideration |
| Buying a house and living together | You may need to consider increasing your life insurance, which pays a lump sum benefit upon your death or diagnosis of a terminal illness. The money can then be used to pay off outstanding debts and the mortgage. Depending on your situation you may also need “TPD Cover, Trauma or Income Protection” |
| Married or unmarried with kids | Think about adding total and permanent disablement (TPD) cover and/or Income Protection Insurance to help you and your family maintain your current lifestyle should you be unable to work due to a sickness or injury. Trauma insurance provides a lump sum payment should you be diagnosed with one of the critical illnesses listed in your PDS. You can also usually add child trauma cover for free with select providers, which is designed to protect your kids against many dangerous illnesses and injuries. Even when your partner is not working, it still makes sense to purchase couples life insurance, especially if your partner is the one primarily responsible for taking care of the household duties and raising the children. |
| Pre-retirement | At this stage, you and your partner might want to look at reducing your level of cover because you have less financial responsibilities; your house might already be paid off and your kids grown-up. |
| Retired | You might want to only leave enough life insurance to help your family pay for your final expenses when you pass away. |
Life insurance for married couples
If you’ve recently gotten married or planning to get married, make sure to review your existing insurance coverage and that of your spouse to determine whether you both have enough coverage on your own and whether additional protection is necessary.
Life insurance for young married couples
Life insurance for young couples, between the ages of 18 and 30, is usually more affordable because your age has a significant impact on the premium you can expect pay. Generally, the younger you are the lower your risk of premature death and the less likely you are for developing a sickness or becoming injured, thus insurance companies tend to offer cheaper premiums.
Disability and critical illness insurance are also important considerations so you and your partner will be able to continue your lifestyle should one of you no longer be able to generate an income because of an illness or injury.
Why should recently married couples consider life insurance?
Now that you’re a two-income family, you might want to increase your coverage to protect each other from financial hardship should either of you pass away or become ill or injured and unable to work.
Ask yourself whether the life insurance coverage you and your spouse have is enough to protect your combined earning power.
You might also want to nominate your partner as the beneficiary of your policy and have your spouse do the same. Complete these changes as soon as possible after the wedding to ensure the benefit payments will be provided to the correct persons.
Can unmarried couples get life insurance?
Yes, generally people living together at the same address can get life insurance for unmarried couples. If someone is financially dependent on you, it’s time to think about getting or increasing your life insurance coverage, especially if you’re living together and have children.
What are the rules regarding life insurance for gay couples?
In 2008, the Federal Government granted same-sex couples the same rights as unmarried couples living together. The rules regarding life insurance for gay couples are thus the same as for heterosexual couples living together.
Frequently asked questions and answers
Who should the nominated beneficiary of a joint policy be?
You can choose to name each other as beneficiaries of your joint policy, or you can decide to name your children, parent(s), friends or whoever else you want.What happens to a joint life insurance policy if couples divorce?
When a couple decides to separate, and they have a joint life cover policy, then they can either, 1. Keep the plan as is, and determine who’ll be responsible for the payments and whether the nominated beneficiary(s) should change 2. Cancel the policy and take out two separate plans or 3. Transfer ownership to one of the parties involved.Can I take out a life insurance policy on my partner?
Yes, you can generally purchase life cover on your partner if they have provided consent during their duty of disclosure at application time. You would be the owner of the policy, responsible for the premium payments, and your partner will be the person insured under the policy.What happens to a joint policy if both couples die?
In the event that both you and partner die at the same time, for example in a car accident, and you are listed as each other’s beneficiaries on the policy, then the lump sum benefit will generally pass to your estate and will be distributed according to your will.
You and your spouse can set up a mirror will, which allows you to create almost identical wills, wherein it states that everything be left to the remaining spouse with a clause stipulating that if both partners die at the same time or within 30 days of each other, then everything goes to the couples’ children or named beneficiary.
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