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Couples life insurance: should we get joint cover or two single policies?

Matthew Lang

Matthew Lang

Updated 15/05/2023

As a couple, you can choose to purchase a joint life insurance policy or two single policies. Your choice depends on your needs and those of your partner.

Couples life insurance: should we get joint cover or two single policies?

Life Insurance Policies For Couples

Life insurance comes in many forms, depending on the type and level of coverage you and your partner are after.

If you're a couple looking to invest in life insurance, or simply gathering information on your options, you've come to the right place.

Key Points

  • As a couple, you can choose to purchase a joint life insurance policy or two single policies. Both have advantages. Your choice will largely depend on your needs and those of your partner.

  • Premiums will rise as the years go by. It's a good idea for newlyweds or younger couples to start shopping around as soon as possible to lock in a lower rate.

  • You should review your life insurance policy periodically to ensure your changing needs are met.

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Types of life insurance to consider

Regardless of whether you're shopping for yourself or your partner included, it's handy to know about your options when it comes to life insurance. There are four main types of life insurance to consider:

Income protection

If you become unable to work due to illness or disability, income protection provides cover of up to 70% of your current income.

Note that income protection is also commonly known as 'income replacement insurance', 'disability income insurance' or 'salary continuance insurance'.

Don't be confused by the differing terms, rest assured they all mean the same thing.

If your illness or disability is chronic or permanent, payments may continue until you hit a certain age, such as 65.

The exact age depends on your policy, so it's best to confirm these details before signing up.


Total and permanent disability insurance (TPD)

TPD insurance covers you in the event you become totally or permanently disabled and as a result, unable to work.

There are different types of TPD insurance, and if you're interested, you can read about them here.

What's the difference between income protection and TPD insurance then?

Income protection covers you for both short-term and longer-term illnesses/disabilities, whereas TPD covers you for total, permanent disability only.

Further to this, income protection provides you with an ongoing benefit (usually monthly) while TPD payouts are generally paid as a lump sum.

Life cover (or life insurance)

Life cover (as suggested) covers your individual life.

Should you pass away or be diagnosed with a terminal illness, you will receive the benefit of a lump sum payment.

This payment can cover your family for funeral expenses, school fees should you have children, ongoing living expenses, mortgage payments and other debts.

Trauma Insurance

Trauma insurance provides a lump sum should you be diagnosed with a specific illness (which will be listed in your policy).

These illnesses usually include cancer, stroke or heart attack, for instance.

The payment you receive can be used to reduce your working hours, pay for treatment, rehabilitation and/or a carer.

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Life insurance options for couples

When couples look at purchasing life insurance policies together, they are usually married or in a de facto relationship (in other words, they are generally living together).

You and your partner are likely to share a lot together, whether it be a home or mortgage, children, pets, vehicles or salaries.

It makes sense to shop around together, right?

In many cases, yes. You and your significant other have two options when it comes to purchasing life insurance.

You can purchase two single policies or a joint policy (also known as a multi-policy).

Joint cover VS two single policies

A joint policy covers multiple people, whereas a single policy will cover just yourself.

There are benefits to either option, and therefore there's no one 'best' policy.

You and your partner will need to think about what insurance plan will work best for you both.

Benefits of a joint policy

If either partner passes away, the person left behind will receive a payout.

This can take financial pressure away during a difficult time.

Benefits of two single policies

Another option is to purchase a single policy and add your partner as a beneficiary (meaning the payout will go to your significant other), should anything happen to you.

Your partner will also need to do the same, and add you in as a beneficiary.

So, if a joint policy is cheaper, why would a couple choose to purchase single policies?

Single policies are ideal in the following cases:

  • If there is a significant age difference in the partnership

  • If both partners have differing health requirements/life insurance needs

  • Where one spouse doesn't need or qualify for life insurance

A person's age can affect joint policy premiums, so if one partner is significantly older than the other, purchasing two single policies may be worthwhile for financial reasons.

It's also important to consider the individual health requirements of each partner.

If one or both partner/s have special health requirements, they may find better policy matches when shopping for individual policies.

Only one of us works. Should we both have a policy?

If only one partner works outside of the home, this doesn't mean you should only purchase one policy.

Sure, one partner may be relied upon to bring income into the home, but both partners will make contributions to the household.

In order for a household to run smoothly, chores need to be done and bills need to be paid. If children are living at home, this needs to be taken into consideration also.

Never underestimate the value of housekeeping services.

Whether you take the time to cook, clean, and care for others, or you invest in these services, there will always be a cost involved.

If one partner passes away, household duties may need to be paid for if the partner left behind does not have the time to meet work/home demands, particularly during a difficult and stressful time.

The death benefit can cover these costs, relieving both financial and time pressure.

When should a couple buy life insurance?

It's a good idea to start shopping around for life insurance at a young age.

Newlyweds? Just starting your life together? It's a good idea to start shopping around for life insurance.

Planning ahead and buying a policy early on is beneficial because premiums will be much more affordable.

As the years pass, your premiums rise based on your age.

Lock in a policy while you're young to avoid a more expensive premium later on.

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How much life insurance do couples need?

Every couple is different, but there's a way you can estimate the cash you will need should anything happen to you or your partner.

Add up the cost of everything you will need the death benefit to cover. For example, you might want to consider:

  1. Funeral costs

  2. Income replacement

  3. Mortgage repayments

  4. Other debts

  5. Education/school fees

  6. Day-to-day living expenses

Now consider the current assets you and your partner have.

The difference between the money you will need to accomplish the above goals (i.e. have immediate and ongoing expenses paid for) and your current assets, will be the amount of cover you should opt for.

Should we buy life insurance from the same company?

If you decide to take out separate policies, you may be wondering whether you should purchase life insurance from the same company.

In some cases, you might decide to go with the same company if you and your partner have the same needs.

Going with the same company will likely simplify the shopping and payment processes.

On the other hand, you shouldn't limit yourself to one company if it doesn't make sense for you to do so.

If your partner has different needs/requirements to your own, it's a good idea to shop around and find the best policy for each of you, whether it be with the same company or not.

At the end of the day, the most important thing is that you feel financially secure and have peace of mind.

Find a policy that delivers this value for you.

My partner and I have life insurance. Should we upgrade our policy?

As we age, our health requirements change, as do our life circumstances.

For this reason, it's a smart idea to review your life insurance policy periodically and upgrade when necessary.

If you and your partner take on new financial obligations, such as purchasing a new house, you may want to consider upgrading your cover, because with a bigger mortgage comes more financial stress should anything happen to you or your significant other.

Similarly, you may decide to have a baby or expand your family.

Seeking out extra cover could go a long way.

Even for peace of mind, it's a good feeling knowing your partner and children will be covered financially should they require the benefits.

Income Protection

Income Protection

This guide is of an informative nature only and not representative of Compare Club products. It should not be taken as medical or financial advice. Check with a financial professional before making any decisions.

Matthew Lang is the general manager of life insurance at Compare Club. Matthew leads a team of dedicated professionals who are passionate about helping individuals and families make informed decisions about their life insurance needs. Whether it's finding the right coverage for your specific circumstances, comparing policies, or optimizing your existing policy, Matthew and his team are here to provide expert guidance and support.

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Matthew Lang

General Manager of Life Insurance