Can a wife buy life insurance on her husband?

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Important things to know...
  • Insurance, as a whole, is used to cover many kinds of risk. Life insurance is used to cover the financial risk, to a family or business, of losing a key player.
  • If loss of your spouse will cause a financial loss to your family, you probably need life insurance to help mitigate that risk. A licensed insurance advisor can assess your individual needs.
  • Insurance is based on “insurable need.” The insurance company will want to know why you need life insurance on your spouse and will help you calculate how much you need.
  • Many people own their own life insurance policies, which they do not realize might result in estate taxes for their heirs. You’ll want to structure your life insurance policy correctly to reduce the likelihood that it will be considered taxable income to the family you leave behind.
  • Life insurance is overseen by state governments. You can find trusted sources for information and services from your state’s Department of Insurance. Find a link to your state on the National Association of Insurance Commissioners website.

This question often comes up right after the death of a loved one. Sudden or otherwise, an influential person’s passing can impact not just an immediate family, but an extended family as well.

At such times, when the loss is fresh and painful, the costs of a funeral and a burial are adding up, and the impact of losing the deceased’s income is just beginning to be felt, the family’s jumble of emotions may include not only grief but real and present panic.

But can a wife buy life insurance on her husband? Yes!

Find out more about buying life insurance below, but don’t forget to compare life insurance quotes above!

Should A Wife Buy Life Insurance On Her Husband?


Because the purpose of life insurance is to guard against risk, husbands and wives owning life insurance policies on each other is more the norm than the exception. This includes domestic partnerships and civil unions.

Life insurance is based on a concept called “insurable need.” Anyone who has an insurable need in another person’s life may take out a life insurance policy on that person.

What is Insurable Need?

The term “insurable need” frames the idea that if a person were to be suddenly out of the picture, a financial “loss” would result.

To determine whether a wife needs life insurance on her husband, or the other way around, a consumer might pose these questions:

  • Would the wife experience a financial hardship — or, in insurance terms, a financial “loss”  if her spouse passed away unexpectedly?
  • Would housing security become an issue for the family? Without a financial parachute like life insurance, could they keep up with mortgage payments and stay in the house?
  • Would the quality of life for the children take a negative hit? For example, would a college education become out of reach?
  • Could the wife keep current with the rest of the family’s debt — credit cards, car loans, student loans, etc.? Or could they be quickly swamped?
  • Is this a “sandwich generation” family? Are they taking care of elderly parents at the same time they are raising young kids?

A yes answer to any or all of these questions would in most cases constitute an insurable need. Other factors will come into play, like the health and personal history of the proposed insured, but a credible application to an insurance company may certainly be made.

Who Should Own The Policy?


The question of who should own the policy comes down to taxes.

If a wife takes out a life insurance policy on her husband, she may want to be named as the owner of the policy. Tax law dictates that if the insured owns the policy himself, the policy will be considered part of his taxable estate when he dies.

However, if the spouse owns the policy, the life insurance benefits will be paid tax-free.

What About the Spouse Who Stays Home? Should They Be Insured Too?

Even if the wife is the working spouse, she may still want to take out an insurance policy on her partner.

The stay-at-home spouse most likely handles essential household tasks like shopping; cooking; maintaining the house, yard, and cars; facilitating the children’s out of school-time activities.

Maybe they also take care of family business like paying the bills and keeping the family’s books.

We often undervalue, in monetary terms, the contribution of a stay-at-home spouse.

But the loss of that person will also have a financial impact. In their absence, the family will need to pay out of pocket for many of these services.

Things to Know About Insuring Your Spouse or Any Adult

An adult, or in most states any child over 16, must consent to a life insurance policy on his or her life. The reasons for this may be obvious.

Since the most common type of life insurance, term life, pays benefits only upon death, the ability to “secretly” insure the life of another adult raises legal and moral questions of motive and might enable all kinds of shady goings on. It does not take much imagination to come up with several scenarios.

Such an ability would create a financial stake in a life without the necessity of proving “insurable need.” The insurance industry has decided this is not a good idea and forbids it.

Also, to be insured the proposed insured will usually have to prove that they are in good health. This is otherwise known as proving “insurability.” It is very hard to get life insurance after you are sick.

The person who will be insured must also be of “good character.” In insurance terms, that means they are not a known risk taker. Their legal, medical, and driving record will all be scrutinized by the insurance company. Insurance companies are allergic to risk.

Shopping for Life Insurance


Life insurance should be a family conversation, just like the rest of a family’s finances. Transparency breeds trust, and when couples sit down and talk about life insurance, each party can be sure that the other has their best interests at heart.

They should learn about the different types of life insurance and how they are used. They must ask the right questions to pinpoint their exact needs:

  • Does their situation warrant a large term insurance policy to cover many assets?
  • Do they want a long-term savings plan utilizing cash-value life insurance, creating a nest egg that they can use in retirement if they do not die prematurely, but instead live a long and happy life?
  • Do they both work, and would the loss of the partner’s income hurt the family?
  • Do they own a business, and would that business survive in the absence of the partner?

Every family’s situation is different. It is best to get the help of a licensed life insurance advisor.

Like so many other things in life, the time to get educated about life insurance is long before you need it. Insurance is considered one of the pillars of a financial plan. It is a defense strategy. Its job is to protect.

Life insurance protects in many different ways. Most people are familiar with only one or two. It is worth learning more about life insurance, and the many ways it is used by individuals and companies to build, and secure, assets, lifestyle, and financial independence.

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