After having our first child together in 2023, my husband and I agreed that we both needed life insurance. Before that, he felt it was a waste of money, while I believed it was a good financial move.
In my opinion, life insurance offers benefits not only after one of us dies but also while we’re alive. For example, some policies can be used as a supplemental source of retirement income or have a cash value that can be withdrawn or borrowed against if needed.
However, it wasn’t until we had our first child that my husband was finally on board with getting a policy. He wanted to make sure there would be financial support for one of us and our child if anything happened to the other person.
As we priced out policies, we found that we could save money if we bought life insurance together. We looked at three options for getting life insurance together.
1. Get a joint life insurance policy
We quickly decided it didn’t make sense for us to have two separate life insurance policies. Since we’re married, we can get a joint life insurance policy — we looked at one through New York Life Insurance. Also known as a dual life insurance policy, it’s a single policy that covers both of us.
There were two different types we could pick. A first-to-die policy is paid out when the first policyholder dies, which is helpful if there’s a lot of financial obligation that would fall on the surviving partner, like a mortgage or significant loss of income.
The other option is a second-to-die policy that pays out after both people pass away and would benefit my daughter’s financial future and well-being.
In our situation, a first-to-die policy would make the most sense since our living expenses are quite high, and we rely on both incomes to sustain our lifestyle and pay our bills.
Joint life insurance is less expensive than taking out two separate policies, but it only pays out once. Two separate policies would have two payouts and potentially pay out more in the long run.
2. Bulk discount on two separate policies
We also noticed that some life insurance policies offered a bulk discount if we both got two separate life insurance policies simultaneously. Progressive Life Insurance was one option that also offered bundles with other types of insurance, like auto or renters insurance.
Going this route would allow each of us to have more customized coverage based on our health, financial goals, and desired policy coverage and also potentially save 5% to 10% over buying policies completely separately.
While we don’t plan on getting divorced, having separate life insurance policies makes it easier for us to hold onto our own policies if we do end our relationship.
3. Take out one policy with a spouse rider
Another option we explored was that one of us would take out a life insurance policy and add the other to the policy with a spouse rider, like the ones offered by State Farm Life Insurance. This would be less expensive than taking out joint life insurance or getting two separate policies.
This option provides coverage if the policyholder’s spouse dies. However, it seemed to be more risky since the coverage amount for the surviving spouse was quite lower than the other options we priced out. Plus, there’s also a chance that if the policyholder dies before the spouse, they won’t receive any payout.
We went with a joint policy
After exploring these options, we found ourselves the most interested in pursuing first-to-die joint life insurance so that we could get a discount and both have coverage in case something happened to one of us down the road.
