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Life Insurance for Young Couples
Life Insurance for Young Couples
Written by
Madeline Pettet
Edited by
Laura Crowden
Reviewed by
Adrian BennettEasily compare life insurance quotes
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What is life insurance?
Long story short
If something unfortunate were to happen to either of you, life insurance might help cover regular bills
For instance, if you were unable to work due to serious illness or injury.
Taking out life insurance when you’re young could help ensure you have appropriate cover later in life
You don’t need to be married, own your home, or have kids to take out cover.
Factors like your age and health affect your life insurance premium
The cover type and amount insured you choose can also play a role in how much your cover costs.
What is life insurance?
Folks in the know use the term life insurance to refer to a range of insurance products designed to help look after you and your loved ones if something were to happen to you. This can include cover in case a serious injury or illness means you can’t work, you become totally and permanently disabled, or you sadly pass away.
Why might young couples consider life insurance?
Ultimately, life insurance is there to give you peace of mind that, even if the unexpected happens, you’ll have financial assistance to help protect your shared life.
For instance, depending on your policy and circumstances, a successful claim may mean you have funds to help:
- pay mortgage repayments and any other debts
- pay rent, and everyday bills and expenses
- support your children (or future children), including their current and future education.
If you passed away while covered by term life insurance, your partner could use some of the funds to pay your funeral expenses. This could help make an extremely stressful and difficult time a little easier on your loved ones, while also meaning they can celebrate your life and say goodbye to you in a way that matters to your partner and family.
Without life insurance, your financial independence as a couple and family could be at risk if something were to happen to you or your significant other. As a result, you may be unlikely to be able to maintain your current lifestyle. What this may look like can depend on your unique circumstances, but it might mean making big changes to your life. These big changes could go on to have ripple effects on future plans, like children and retirement.
When should young couples consider life insurance?
Moving in together
Beyond discovering the quirks and compromises of cohabiting, this is a time when many young couples start to share assets and have greater financial reliance on each other. For instance, given how expensive renting in Australia can be – the median weekly rent in our capital cities ranges from $550 to $750 as of April 20251Australian Institute of Health and Welfare – Housing data – pooling incomes might mean a nicer place to call home without having to scrape by. Life insurance might be a way you choose to help protect this combined income.
Getting married
Like moving in together, getting married can be another time when young couples merge their finances, spending on average $36,000 on their wedding, with 60% of those surveyed taking out a loan to do so.2Moneysmart – Getting married Life insurance might be able to help pay this debt off in the event either of you become ill or injured or pass away.
Buying a house
Whether you’ve found the perfect place to call home or just want to be ready with a mortgage lined up, this is another big moment in any couple’s partnership. Together you’re taking on a large and lengthy financial commitment – very possibly the largest either of you have ever had. As of March 2025, the average home loan for an owner-occupier dwelling is $660,000.3Australian Bureau of Statistics – Lending indicators A 25-year loan this size could come with monthly repayments of $4,266.4Repayment calculation assumes 6.01% interest with no future changes and monthly fees of $10. Calculated using Moneysmart – Mortgage Calculator. Life insurance might help you continue to manage these payments if something were to happen to either of you.
Starting a family
Potentially an even bigger financial commitment than a house; it’s certainly one that will eat into more of your sleep. Having kids (or even just thinking about it) can prompt a lot of young couples to consider what they’d do if things suddenly changed for the worse. This is in part due to the expense of caring for children. The average daily fee for centre-based daycare was $133.96 in September–December 2023,5Australian Competition and Consumer Commission – Childcare inquiry: Final report and then there are clothes, food, and more to cover on top of that. But it can also mean an increase in unpaid labour, particularly for the primary caregiver. Raising a young family may also mean one or both parents need to reduce their working hours and therefore their income. Depending on the policy, life insurance might help you continue to care for your family if you or your partner were suddenly unable to due to illness or injury.
Experiencing a tragedy
Whether it affects you directly or you’ve seen the effects it’s had on friends and family, a serious injury or illness, or the unfortunate passing of someone, can make young couples consider ‘what if?’ something like that happened to them. Life insurance might mean you can take the time to recover from an injury or illness, or help your partner and family maintain their lifestyle if you passed.
Wanting to make the most of being young
Of course, you don’t need to wait until you hit a milestone on your five-year plan to take out life insurance. In fact, getting it sooner rather than later could be a good long-term play. Buying life insurance when you’re young may help you avoid not being able to get cover later in life when your health isn’t what it used to be. Similarly, you may be able to enjoy cover at a lower premium.
Helpful tip
Those big milestones, like buying a house or having a kid, can really change your life. But it doesn’t necessarily mean you need to overhaul your life insurance at that point or hold out to get cover in the first place. In fact, some policies allow you to update your cover without needing any medical checks. This could help ensure your life insurance is what you’re after without risking losing coverage or drastically driving up your premiums.
Adrian Bennett
General Manager for General Insurance
What types of life insurance should a young couple consider?
Your life insurance needs are as unique as your relationship. While we can’t tell you exactly which policy to pick, we can give you some food for thought on the different life insurance types available to choose from.
- Term life insurance: This is a lump sum payout if the listed person, such as yourself or your partner, passes away. If you have a mortgage or other big debts, along with financial dependents, it might help keep life as normal as possible for them if you were no longer here.
- Total and permanent disability (TPD) insurance: Another lump sum payout, this is if you experience a total and permanent disability, affecting your ability to work again. Some policies cover domestic duties too – unpaid labour is still work – so you may be covered whether you’re the main income earner or the superstar stay-at-home parent.
- Income protection: A serious injury or illness may not be the end of your career, but it could mean stepping away for a while. Income protection is designed to ensure you still receive some of your regular income each month to stay on top of bills and everyday expenses.
- Trauma insurance: If you’re diagnosed with a specified illness, you may receive a lump sum payout, which can be used to help cover medical expenses and taking time off to recover. It might offer some much-needed relief at an otherwise difficult and emotional time in any relationship.
There’s no best life insurance policy or type of cover for all young couples. It’s about what speaks to you and your partner. This could be just one kind of cover type or a combination. This might mean diving deep into policies’ product disclosure statements (PDS).
How much is life insurance for a young couple?
How much your premium costs will depend on your age, health, and occupation, among other factors. The cover you choose, including your benefit amount and waiting periods (if relevant), will also play a role. It comes down to risk; generally the more likely you are to claim, the higher your premiums may be.
If you’re taking out life insurance as a young couple – namely choosing a joint policy – your premium will take into account the above variables for both of you.
Whether you choose individual or joint policies, discounts or reduced premiums might apply for a time.
How much life insurance does a young couple need?
To answer this question, young couples often consider what funds they need to replace their income and provide financial support for their living expenses, including paying off any debts. The amount of cover may be higher or lower depending on what other financial support is available, like savings, investments, superannuation, and even help from family and friends.
How much life insurance could Shannon and Jake consider choosing?
Our fictional friends Shannon and Jake recently celebrated their first wedding anniversary. Out at dinner, they reflected on the busy year it’s been – they purchased their first home, Shannon was promoted, and Jake custom-built a lavish puppy palace for their new dog. The year wasn’t all smiles, though. Jake’s dad had a cancer scare and leaned heavily on his son for support. This tested Shannon and Jake’s relationship, but they held strong.
It was a bit of a wake-up call for the newly married couple too – if something were to happen to either of them, their parents might not always be there to help, financially or otherwise. And Jake and Shannon certainly couldn’t ask their parents to use their retirement nest eggs to cover the mortgage repayments.
So, Shannon and Jake decided they wanted some form of life insurance, starting with separate trauma insurance. They just needed to work out how much trauma cover they’d each need. They make this decision based on how much of their incomes go towards regular expenses. In Shannon’s case, her income covers 60% of their regular expenses, while Jake’s earnings cover the remaining 40%. The pie charts show each person’s cover needs for a year.
Shannon takes out trauma insurance with a benefit amount of $202,000, while Jake’s benefit amount is $163,000.
Note: Example is hypothetical. Your scenario may be different. Only whole numbers used in calculations.
Frequently asked questions
Do we need life insurance if we don’t have kids?
Life insurance and the financial stability it could offer may be helpful for parents, but looking after the kids (or planned kids) isn’t the only reason many couples choose to take out life insurance. For instance, an unexpected accident or illness could leave you and your partner unable to cover the rent or mortgage repayments, plus everyday bills and expenses. Life insurance is meant to help you generally maintain your current lifestyle, whether that’s with kids or without.
Does it make a difference if I buy life insurance when I’m single or in a couple?
Whether you’re single, in a de facto relationship, or married doesn’t necessarily change if life insurance is worth it for you. At the end of the day, it’s about peace of mind and what matters to you.
However, if you’re looking to buy life insurance as a couple, there are a few ways you may be able to play it.
- Choose your own individual policy: You’d be the owner of a policy that covers you and lists you as the beneficiary – unless you’re picking term life insurance, then you may want to list your partner as the beneficiary.
- Take out a joint policy with your partner: Together, you’d be co-owners of a single policy that covers both of you. You may also both be listed as beneficiaries, depending on the circumstances.
- Purchase policies covering each other: In this cross-ownership arrangement, you each own a separate policy that covers the other person. This is usually for term life insurance options.
You may want to keep in mind that how you choose to approach life insurance (i.e. as an individual or couple) might affect your premium.
What happens to our life insurance if we break up or divorce?
If your relationship status changes, sorting out your life insurance may not be on top your to-do list. However, it is a task that will likely require addressing. This could be simple administrative changes, like updating your listed address and direct debit arrangement. Other times, you may need to change some fundamentals of the policy.
For instance, you may want to change the listed beneficiary from your former partner to someone else. Some people, though, choose to keep their ex as a beneficiary if they share children or financial liabilities.
Speaking of, if the end of the relationship also means the end of shared financial commitments, young couples sometimes revisit their cover amount. Alternatively, one fewer income stream could mean needing to review and possibly increase the cover amount to help with financial independence if you’re unable to work.
You may like to keep in mind that if you share a joint policy or have a cross-ownership structure (that’s when your life insurance policy covers your partner, rather than yourself), you may need to discuss the changes you’d like to make. On a joint policy, any changes typically need the approval of both of you.
Where can I find and compare life insurance?
While breakfast in bed or a surprise weekend away are fantastic ways to show your significant other how much you care, taking the time to sort out your life insurance can be just as meaningful, if less Instagram-able. Although no relationship is sunshine and roses all the time, life insurance can be a way to show your commitment and care for your partner through good times and bad.
So, whether you want to bring some options to the table or browse together, iSelect is here to help. Using our easy-to-use online comparison tool, you can check out and purchase different life insurance policies from a selection of insurers.
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iSelect’s partnered with Lifebroker (AFS Licence number: 400209) to help you compare a range of Life Insurance policies. iSelect earns a commission from Lifebroker for each customer referred through the website or contact centre. Lifebroker do not compare all life insurers or policies in the market.
iSelect Life Pty Ltd – ABN 89 124 304 347, AFS Licence Number 331128. Any advice provided by iSelect is of a general nature and does not take into account your objectives, financial situation or needs. You need to consider the appropriateness of any information or general advice iSelect gives you, having regard to your personal situation, before acting on iSelect’s advice or purchasing any policies. You should consider iSelect’s Financial Services Guide which provides information about iSelect services and your rights as a client of iSelect.’