Term Life Insurance for Couples
Find out which of the 3 most common models is best for your situation
Have you decided you and your family need term life insurance, but you’re not sure which insurance model best fits your situation? We’ve summarised the top 3 models for couples to help you make the right decision.
1. Joint life insurance policy
How it works: You and your partner get one shared policy. Should you or your partner pass away during the term of the policy, the surviving partner receives a lump-sum payout.
This 2-in-1 policy is usually less expensive than other options, but it is also less flexible. For example, if you and your partner separate, it is difficult to adjust the contract. It’s also important to note that the lump sum will only be paid out once – even if you and your partner pass away at the same time. This type of policy can be a great option for couples who are not planning to have children.
2. Two separate insurance policies
How it works: You and your partner each get a separate life insurance policy. You list your partner as your beneficiary, and vice versa. If you pass away, your partner will inherit the arranged lump sum. If the worst happens and you and your partner pass away at the same time, your children will receive the lump sum from both policies.
This model is especially well-suited to married couples with children, as unmarried couples are taxed on inheritance over €20,000. For married couples, the first €500,000 of inheritance is tax free.
3. Cross ownership of insurance policies
How it works: You and your partner each get a separate life insurance policy. But in this model, instead of listing your partner as the beneficiary, you each list yourselves as beneficiaries. So this way, your partner counts as the “insured person”, but you will receive the insurance payout. This means that if one of you dies, the other receives the payout.
The benefit of this model is that the money that is paid out does not count towards the inheritance sum. Instead, it counts as an insurance benefit, meaning you do not have to pay inheritance tax on the money you receive. With this model, both insurance policies can pay out if you and your partner pass away at the same time. However, because you are insuring the life of another person, it can be difficult to make changes to the policy. So if you are sure that you and your partner are going to stay together for the long run, then this model can be very beneficial for married and unmarried couples, with or without children.
It’s especially important for couples to get life insurance if you both earn an income to cover your living expenses. Which of the three models are best for you depends on your marital status and whether or not you have children.
We aim to help you get the best insurance cover so you can simply enjoy your life. That’s why we provide you with all the information you need to make the right decisions. We have access to a network of consultants who can give you non-binding advice and help you find the right insurance.
