Two Asian parents hold their baby between them while smiling.

Should Both Partners Have Life Insurance?

Updated November 2, 2019 . AmFam Team

Individual life insurance policies are something both partners in a relationship should consider having. Learn more about why both partners need their own life insurance from American Family.

You and your partner are a team. Together, you manage your household, your purchases and your long-term finances. Life insurance is a no-brainer for you. But do both of you really need your own life insurance policies?

While it might seem like a money-saving option for only one of you to have life insurance, or for both of you to rely on your employer for life insurance, it’s best for both of you to have your own policies. You never know what will happen, and it’s always smart to be prepared for the unexpected. And if one of you is a stay-at-home parent, they won’t have the benefit of employer-provided life insurance, so you’ll want to seek out a policy that fits your family’s needs.

Reasons Both Parents Should Have Life Insurance

If you pass away before your partner, you’d potentially be leaving your partner and other family with financial obligations like a mortgage, car loans or college tuition bills. If both of you have your own life insurance policies, you can mitigate those expenses while still having another policy for your loved ones to benefit from when your partner eventually passes away, too. Here are a few good reasons for both partners to have their own life insurance policies:
  • It can help your partner pay bills after you’ve passed away.
  • Your partner won’t need to dip into savings to maintain their standard of living.
  • Your policy can provide funds for your kids’ college education.

Because there typically aren’t restrictions on what a life insurance policy’s death benefit can pay for, you and your partner can discuss what the money would be best suited for before either of you pass away. Your needs as a family may change over time, so have the conversation often to reassess if your current life insurance is meeting your needs.

What Type of Life Insurance Should I Get?

There are a few major types of life insurance to consider when shopping around. Deciding which one is right for you depends on your age, your assets and your lifestyle. Talk to your insurance agent to figure out what type of life insurance you and your partner should purchase. In the meantime, here are some options to get familiar with.

Term Life Insurance

Often purchased by younger people, term life insurance is a type of life insurance that lasts for a specific length of time or “term.” It’s generally more affordable, has compared  to whole life insurance and may require fewer health qualifications than other types of insurance. Some term life insurance policies can also be converted into whole life policies, allowing you to adapt your life insurance policy to your needs as you age.

Whole or Permanent Life Insurance

Whole life insurance is exactly what it sounds like: life insurance that can last your whole life. This is great for couples who want a bit more stability when it comes to their life insurance and are interested in building what’s called “cash value” in their policies. Whole life insurance is typically more expensive than term life insurance, but because it won’t terminate after a set amount of time, your policy will stay active as long as you pay your premiums.

Universal Life Insurance

A Universal life insurance policy is a good option for people who want to manage their life insurance policies more closely. Universal — life insurance earns cash value like a whole life policy and can be a great option for couples at any stage of their lives. You can typically increase or reduce the amount of coverage and premium amount, depending on the terms and conditions of your policy.

Life insurance is a proactive way to secure your loved ones’ financial futures and provide for them after you’re gone. Connect with your American Family Insurance agent (Opens in a new tab) to discuss life insurance options for you and your partner and build a plan to help protect what matters most to you.

Related Articles

  • Grandparents and grandkids riding bikes through the forest
    Grandparents and grandkids riding bikes through the forest
    Life Insurance for Children

    You understand the importance of providing a secure financial future for your loved ones, and purchasing a life insurance policy on a child (with the ability to transfer ownership of the policy in the future when the child becomes an adult) can help you do just that. Let’s take a look at how a life insurance policy can help you proactively protect your loved one’s financial future.

    Why Is Children’s Life Insurance a Good Purchase?

    A life insurance policy is a purchase that can last a lifetime. Whether you purchase it on your child or grandchild, there are a number of benefits.

    Low premiums

    Since the cost of life insurance depends largely on things like age and health, purchasing a life policy when they’re young can lock in a low premium for the entire policy payment term.

    Protect their ability to secure life insurance in the future

    One of the biggest benefits of buying life insurance on a child is protecting their ability to secure life insurance in the future. When purchasing a permanent life policy on a child, your policy might include (if not, you might have the option to add) a Guaranteed Purchase Option (GPO) benefit to ensure the opportunity to purchase additional life insurance on them at certain ages and life events down the road without a medical examination or proof of health.

    Build cash value

    A permanent life insurance policy has the ability to accumulate cash value year after year. The earlier you start, the longer cash value can build, so when you purchase a life insurance policy for children when they’re young, the cash value has a lot of time to grow before they may need to use it. And, if ownership has been transferred to the adult child, they can even borrow against their cash value* if needed.

    Should I Purchase Permanent Children's Life Insurance?

    If you’re purchasing life insurance on a child, most people select permanent life insurance since it is built to last the child’s entire life. A permanent life insurance policy provides not only a death benefit, but, as mentioned before, the policy also has living benefits, like the ability to accumulate cash value.

    Purchasing life insurance can be a practical and simple way to help protect your loved ones’ dreams. Check out American Family Life Insurance Company’s DreamSecure Children’s Whole Life permanent life insurance policy to learn more. Or you can also check in with an agent — they’ll be able to answer any questions you may have about children’s life insurance options through American Family Life Insurance Company.

    This is a brief description of coverage and is subject to policy and/or rider terms and conditions which may vary by state. Fixed and guaranteed premiums are statements about the policy as determined at issue, and any changes made to a policy may affect the premium and are subject to our underwriting rules. The words lifetime, lifelong and permanent are subject to policy terms and conditions. DreamSecure Whole Life Insurance policies mature at age 121. Please check with an American Family agent for details on coverages and restrictions.

    *Any loans taken from your life insurance policy will accrue interest. An outstanding loan balance (loan plus interest) will be deducted from the death benefit at the time of claim or from the cash value if surrendered. If the loan balance grows too large for the cash value to support it, the policy could terminate.

    Policy Forms: ICC17-223 WL, Policy Form L-223 (ND) WL, Policy Form L-223 WL, Policy Form ICC17-224 WL, Policy Form L-224 (ND) WL, Policy Form L-224 WL

  • Web_Mother and daughter having a conversation about life insurance
    Mother and daughter having a conversation about life insurance
    The Difference Between Annuities and Life Insurance

    What’s the difference between life insurance and annuities? It’s a common question. If you wonder what it takes to secure a financial future for yourself and those you love, it may be one you find yourself asking. And that’s a very good thing.

    The bottom line: life insurance can help provide your loved ones with the financial peace of mind they deserve if you were to pass away. Annuities provide a tax-deferred way to grow money and provide an income stream. Both should be considered as part of a long-term financial plan.

    Although both share some similarities, the overall purpose of each is very different. Let’s take a quick look.

    Life Insurance Helps Protect Their Financial Future

    When comparing life insurance and annuities, the biggest difference is that life insurance is designed to help protect against a financial loss for others after your death. Annuities on the other hand help protect you financially while you’re still alive.

    Life Insurance helps to financially secure your loved ones’ future, since the death benefit can help with things like replacing your income and meeting important financial needs such as:

    • Funeral costs
    • Daily living expenses
    • Mortgage payments
    • College funding

    When you purchase life insurance, you aren’t purchasing it for you — it’s really a purchase for the people you want to take care of.

    If you want to find the right life insurance for you and your loved ones, American Family Life Insurance Company has the customized options you're looking for. If you want to learn even more life insurance, read up on the specifics of how life insurance works.

    Annuities Help Prepare You for the Future

    Think of an annuity as a tool that could help meet your retirement needs. The primary purpose of annuities is to create income for you, and this can be done in a few different ways. You can set up payments that last for your entire life, a specific period of time or a combination of both.

    There are many potential benefits of annuities. Some include:

    • The ability to grow account value on a tax-deferred basis
    • The potential for a future income stream that can’t be outlived
    • The possibility of a lump sum benefit that can be paid to a surviving spouse

    How do annuities work?

    You can buy an annuity by giving your insurance company either a single lump sum or making payments over time. The insurance company then invests your money — referred to as a premium or purchase payment — in different ways depending on the type of annuity you select.

    You can buy an annuity that begins making payments back to you right away — this is called an immediate annuity — or if you prefer, annuities are available that delay making payments to you for an extended period, sometimes many years.

    Start Planning for the Future Today

    Life insurance and annuities work in tandem to protect a future for yourself and those you care for. Now that you have a high-level overview, discuss with your agent how these options fit your needs.

    Annuities are long-term insurance contracts intended for retirement planning. Annuities are issued by Protective Life Insurance Company located in Nashville, TN, with administrative offices at 2801 Highway 280 South, Birmingham, AL 35223, through a relationship with American Family Brokerage, Inc., 6000 American Parkway, Madison, WI  53783.

  • Image of a young couple reviewing their life insurance policies with their insurance agent.
    Image of a young couple reviewing their life insurance policies with their insurance agent.
    How Often Should You Review Your Life Insurance?

    When you think about why buying life insurance is important, you probably think of financially protecting your family and loved ones in your life when you pass away. With life insurance in place, you can help ensure financial support for those that matter most. But have you spent time reviewing your life policy and ensuring it still meets your needs since purchasing it?

    We recommend reviewing your life insurance every year. Having the right coverage in place means less for you — and those you care for — to worry about. Because so much can happen in 12 short months, it's important to make sure your policy is right for you and your family today.

    To get you started, we’ve put together a list of 9 key reasons why you should review your life insurance policies every year.

  • Father and kids looking at life insurance on laptop
    Father and kids looking at computer for life insurance options
    How Cash Value Life Insurance Works

    You most likely purchased life insurance for the financial protection it provides your loved ones in the event of your death — but there can be some additional benefits to life insurance. Some life insurance policies, such as DreamSecure Whole Life Insurance offers the opportunity to build “cash value,” otherwise known as a living benefit.

    That living benefit is the value in your policy that may be borrowed against or paid out if the policy is surrendered before death.* Let’s take a closer look at how cash value in life insurance works.