The spousal relationship is usually intended to be a permanent one, and with it comes a high degree of financial co-dependence. Today, many working couples will mutually own life insurance for the sake of the other, so that long term financial plans do not have to change drastically if one of them dies.

Even in the case of a non-working spouse, they are probably doing something that brings economic value to the household, a contribution which can be insured with life insurance. Life insurance on your spouse may protect you the same way that life insurance on your life can protect your spouse.

Generally speaking, it is wise to buy life insurance for your spouse when he or she is a main source of income. In that case, if your spouse dies, life insurance will provide compensation that will replace your spouse’s income.

If the spouse does not work, the spouse might still have an economic value to the household that might strain finances if the spouse were to die, like if the spouse takes care of the kids, shuttles them to school and activities, maintains the household, or even takes care of an elderly parent.

All of those things might start costing more money than anticipated if the non-working spouse dies. As couples age, when your spouses are no longer making money to maintain family finances, or taking care of kids, life insurance may not be of crucial importance, or be as affordable for coverage at that age.

But, you may have planned on your spouse helping to provide care for you if you have a long term care need, or you may rely on their portion of social security for income, which would disappear if they were to die. So there are reasons to have permanent life insurance, but they are often outweighed by the opportunity cost of paying for it, even if permanent coverage like a whole life or universal life is acquired while young and healthy.

For estate planning purposes, you may want to get a survivorship “second-to-die” policy to pay for estate taxes for the sake of passing assets to heirs without giving 40% of some of it to Uncle Sam.

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