Life Insurance When You Get Married

Marriage is a legal event that people treat as a financial one, and the gap between those two things is where the useful work is.

Getting married changes inheritance, tax treatment between spouses and who has standing to deal with your affairs. What it does not do is change what either of you earns, owes or would need if the other were not there.

That makes it a good moment to look at protection properly, usually for the first time as a pair rather than as two individuals.

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The short answer

Marriage changes who inherits, how tax works and who can act on your behalf, but it does not create any money. Two people who were each managing alone are now a household where one income may be carrying both, and the useful move is to check what already exists before buying anything, because most couples discover they are both under-covered and one of them is paying for a policy arranged for a life they no longer lead.

What this changes

Your spouse inherits automatically in a way an unmarried partner does not
Transfers between spouses are generally free of inheritance tax, which changes how an estate works
Two separate financial lives become one household budget, often with a shared mortgage
Any existing policies were arranged for a different life and may name the wrong person
You may each have workplace death in service naming someone from years ago
Plans for children, if there are any, change the time horizon considerably

The bit people miss

The common finding is not that a newly married couple has no cover. It is that they have two policies arranged years apart for different reasons, often with beneficiaries or trusts naming a parent or an ex-partner, and neither policy reflects a joint mortgage or a shared life. Nobody checks, because both policies are quietly paying out of a direct debit and appear to be doing their job.

Check What You Already Have Before Buying Anything

This is the single most useful thing a newly married couple can do and it costs nothing.

Between you there is often an old policy from a previous mortgage, a workplace scheme with a nomination form filled in during an induction years ago, and sometimes something sold alongside a loan. The beneficiaries may name a parent, an ex-partner or nobody at all, and a policy paid into a deceased person's estate rather than to a named beneficiary can be slower and may be taxed differently.

Updating a nomination form takes ten minutes and is free. Reviewing an old policy may show it is better than anything available now, because it was underwritten when you were younger and healthier. Starting by buying something new, without checking, is how people end up paying twice for less.

Two Policies Or One Joint One

Couples are routinely offered a joint policy because it is simpler and slightly cheaper, and simpler is not always what you want.

A joint life policy typically pays out once, on the first death, and then ends. The survivor is left with no cover at all, at an age when replacing it costs more and after a year in which their health may have changed. Two single policies pay out separately, stay in force independently, and let each person keep their own cover if the relationship ends.

The cost difference is usually smaller than people expect. It is worth seeing both figures rather than taking the joint option because it was the one that appeared on the screen.

What usually fits, and why

Life cover

Usually the starting point, and the question is whether two single policies or one joint one fits better. Two single policies pay out twice; a joint policy generally pays once, on the first death.

Income protection

Often the more useful of the two when neither of you has children yet, because the realistic risk at this age is a long illness rather than a death.

Critical illness cover

Worth considering alongside life cover, particularly if you are about to take on a bigger mortgage together.

Common questions

Does getting married change my life insurance?+

It does not change the policy automatically, which is exactly the problem. Marriage changes who inherits and how tax works between you, but an existing policy keeps paying to whoever is named on it, and that is often a parent or a previous partner. Check the beneficiary and any trust, because updating it takes ten minutes and costs nothing.

Should we have a joint policy or two separate ones?+

Two single policies pay out separately and stay in force independently; a joint policy typically pays once on the first death and then ends, leaving the survivor with no cover at an age when replacing it costs more. The price difference is usually smaller than people expect, so it is worth seeing both before choosing.

We have no children yet. Do we still need cover?+

Life cover matters most when somebody depends on your income, so if you have a shared mortgage the answer is usually yes but the amount may be modest. At this stage income protection is frequently the more useful purchase, because a long illness in your twenties or thirties is considerably more likely than dying, and a household built on two incomes struggles on one.

What about the cover I get through work?+

Worth knowing exactly what it pays and who it pays to. Death in service is normally a multiple of salary, the nomination form was probably filled in at induction, and the whole thing disappears if you change jobs. Treat it as a base to build on and make sure the nomination reflects your actual life.

Is now a good time to arrange it?+

It is a sensible moment, because you are already dealing with paperwork and because protection is underwritten on your health at the point you apply. Arranging cover while you are young and well is cheaper and simpler than arranging it later, and policies taken out now stay on those terms even if your health changes afterwards.

Cover that often goes with this

The gaps we most often find sitting next to this one.