In a dual-earner family, a common mistake is thinking that insurance is "only needed for the main earner." The reality: both incomes - and unpaid work at home too - are load-bearing columns of the tower. The other common question is who plays which role: who should be the policyholder, who the insured? That's what cross-cover is for.
- Either partner's loss is a real risk for the family - cover is typically justified for both incomes, in proportion.
- Cross-cover: each partner takes out a policy on the other's life - the policyholder (who pays the premium) and the insured are two different people, and the payout goes to whoever paid the premium. This requires the other person's written consent.
- For cohabiting partners, the beneficiary designation is especially important: statutory inheritance doesn't protect them the way it protects spouses.
Why cover both partners?
If the lower-earning partner - or the one working at home - is lost, the family's expenses don't fall; in fact, replacing childcare and housework costs money, while the remaining earner's working hours also come under pressure. So sizing isn't "main earner vs. no one else," but two separate calculations, following the method, reflecting the different impact of each loss.
What is cross-cover?
This is the arrangement where the wife is the policyholder on a policy covering the husband's life, and vice versa - typically naming each other or the children as beneficiary. Its advantage is a clean division of roles: the party receiving the payout is also the owner of the policy, the one who paid the premium. Details of the roles: who's who in the policy.
One joint policy, or two separate ones?
Two separate policies are the cleaner route: different amounts, different terms, personalized riders - and one partner's policy isn't affected by a change in the other's life circumstances. "Couple" arrangements can be convenient, but they give up some of the freedom of individual sizing: the logic of layering applies here too.
Cohabiting partners: the designation protects
In a cohabiting relationship, the beneficiary designation isn't fine-tuning, it's a fundamental question: unlike a registered partner, a cohabiting partner isn't entitled to any share at all under statutory inheritance; a named beneficiary designation is therefore not fine-tuning for them, but a fundamental question. Details: spouse, cohabiting partner, child - on legal and tax questions, it is worth clarifying the precise picture with a lawyer and an accountant.
A question about your family's situation? Book a free 20-minute consultation →
