Best Life Insurance for Couples
There is no question that life insurance is essential and a must for every Canadian, even more so when you have a spouse or dependent. The real question in mind should which life insurance policy is the best option for you and your family. When choosing a life insurance policy there are various factors to consider: goal, amount, and duration of coverage; but let’s not forget the budget. Often Canadians end up purchasing the policy they can afford, even if it is not fully covering their needs.
If you are a couple, the reason why you need life insurance is very clear for you and your significant other, but let’s discuss what options you have for your policy. You need to start from the basics.
Life Insurance Policy Categories
There are two main types of life insurance in general: Temporary life insurance e.g. Term life insurance and permanent life insurance e.g. Whole Life insurance.
Typically, a term life insurance policy entails that you pay a premium for a predetermined amount of time and amount. This can be for 10, 20, or 40 years and if you die within that period your beneficiaries are paid out. With term life insurance, you can pick how many years you want to have coverage; therefore, you can choose the policy period with respect to your actual needs.
With permanent life insurance, you have lifelong protection for as long as you continue to pay your premiums and their age limit is 120. Permanent life insurance also allows you to pay off the policy in 10 to 20 years and it will stay in force for life. It also provides you with the ability to accumulate cash and to invest it and let it grow using the available funds provided by the insurance provider. You only pay tax when you withdraw the money, but you have the option of potentially using the accumulated cash tax-free.
Once you have decided on the type of life insurance policy, you can start thinking about the choices you have for your life insurance contract. Single life, joint life, and multi-life insurance
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Two types of life insurance for couples
Couples can decide among two different life insurance contracts considering the number of the life insured: Single life and joint-life insurance. Let’s discover each option in more detail.
Single life insurance policy
As the name suggests, the single life insurance policy is designed to cover one person as insured. The death benefit lump sum is paid out by the life insurance company to the beneficiary upon the death of the individual who is insured.
Joint life insurance policy
Joint life insurance policies cover two life insured and there are two options to choose from Joint first-to-die life insurance & Joint last-to-die.
Joint first-to-die life insurance is issued on the lives of two individuals; the insurance company provides a rate mainly based on the age of the old individual insure. Since both individuals are covered, upon the death of any of them, the policy comes to an end and the death benefit is paid out. Typically in a joint policy, couples name each other as the beneficiary.
Joint last-to-die is quite similar to joint first-to-die contract yet very different. The policy insures two individuals in the policy but the policy pays out the death benefit upon the death of both individuals insured. With this policy, the beneficiary is typically either the estate or the children of the couple.
The Upside to Choosing Joint Life Insurance
There are three benefits of choosing joint life insurance for couples: lower premium, ease of policy conversion, and simple contract management.
When couples go for a joint life insurance policy, the premium will generally be lower since they only pay one policy fee. The premium can be lower depending on if they are purchasing a joint-first-to-die or joint-last-to-die. As you may guess joint-last-to-die policies have even lower premiums.
With joint life insurance, the couple can easily convert their policy to a permanent one if they currently have a term policy.
Another upside to a joint life insurance policy is the simplicity of managing it since the couple has only one insurance product that covers them both.
The Downside to Choosing Joint Life Insurance
There are a few disadvantages to choosing a joint life insurance policy that couples need to think about carefully before choosing this type of policy.
One of the biggest disadvantages is the price for coverage amount. You read that right, price is an advantage and disadvantage of joint life insurance. Even though, joint life insurance help saves on policy fees and it has a lower rate, it is charging that money for one coverage amount which is specified on the contract. If the couple decides to purchase two separate policies, they have to pay more, but they each get a coverage amount which will be paid upon their death. Therefore, if you want to compare price for coverage, joint life is a disadvantage here.
Another disadvantage of joint life insurance is the lack of freedom and flexibility for each individual. When you own a separate policy and you are the insured and policy owner, you have the freedom and flexibility to do as you wish with your policy. For example, if your policy has cash value, if you want to convert your policy or cancel the policy you can do as you see fit. Even though you can do these things with joint life insurance, you do not have absolute freedom. Think of it this way, if you do not wish to continue with a joint policy for any reason, many companies will not allow breaking the policy into two separate policies, and that is a very big disadvantage.
Should I get a joint or single life insurance policy?
Identifying what type of life insurance coverage you actually need may look complicated. However, there are many ways that you can learn what type of life insurance suits your needs and calculate the coverage amount you need. As for the policy type, it is always a smart idea to consult with an advisor and ask them to run a need analysis and find out the life insurance type that works for your situation based on your needs. However, you also have the option to go online and use online software to know a bit more about your needs. For example, you can use AplusWealth online platform “get covered” to know what type of life insurance you need.
Besides using the services of a professional broker or insurance consultant, online services can get you a quote from several Canadian insurers. It is always a smart idea to compare rates and companies before purchasing your policy and you can do so by visiting the AplusWealth life insurance page.
You can also simply contact us and ask questions.
Get Covered an amazing online insurance quote system
Apluswealth Inc., build this software for one reason and one reason only, so Canadians can find an affordable and reliable life insurance policy to protect their loved ones.
No matter if you know the life insurance you need or you require help to find the right life insurance policy AplusWealth Inc., will get you covered.
Go to Get Covered and, get life insurance quotes in under 1 minute and compare the rates of the best Life insurance companies in Canada.