When you were single, you may not have felt the need to get life insurance. Now that you’re married, life insurance should be on your mind. Every decision you make, from your home to your car (and maybe even kids) is made with two salaries. If you die, how can you best support the people you leave behind?
Life insurance is one solution. The cost is low if you’re healthy because death is unlikely during your working years.
The life insurance you already have (if any) is likely too little to fulfill your family’s needs. You may be able to add a rider to your current coverage, adding a spouse isn’t difficult. If not, you can buy a new insurance policy.
Term life insurance for married couples
If you have term life insurance (say term 10 or term 20), rates increase sharply at each renewal. You may be able to save money by getting new insurance with increased coverage to replace what you already have. But don’t cancel any existing insurance until you have new protection in place.
When buying insurance, your premiums are based on your current age. If you plan on having children, you may save by getting insurance now rather than after they’re born. Since insurance premiums are also based on your health, which is unpredictable, you may not qualify for affordable insurance later.
Is health insurance cheaper when married?
Another option to consider, if you’re looking to save money is a Joint-First-to-Die life insurance policy. While you can sometimes save money by each getting a life insurance policy from the same provider, you can sometimes save even more having one policy for both of you. However, be sure to read the fine print. You could pay more for a single policy based on your combined age. The combined age makes 2, 30-year-olds into 1, 36-year-old. But again, you’re only insuring one person now.
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Married Life Insurance – other things to consider
Do you have enough coverage?
You won’t know if you have enough life insurance until you look at your new financial obligations and goals. Your spouse may need more coverage, too.
How will your needs change over time?
You need more life insurance when you have a mortgage and dependent children. As your children leave home and you pay off your mortgage, your insurance needs also usually decline.
Do you have cost-effective insurance?
Each insurance policy has administration charges. Buying one larger policy instead of several smaller ones puts more of your money towards protection rather than the insurance company’s overhead.
Term life insurance provides the highest death benefit for the lowest cost for temporary needs. Permanent life insurance provides coverage which lasts for life and is designed to be affordable over that timeframe.
Can you get discounts?
If you and your spouse buy insurance from the same insurer at the same time, you may get discounts. If you buy more insurance, you can get volume discounts. Paying insurance premiums monthly is easier for budgeting but generally costs more than paying annually.
Do you have the right beneficiary?
When you were single, you may have designated a sibling or a parent as a beneficiary. Now that you’re married, you probably want the proceeds to go to your spouse. You can get the appropriate forms to change your beneficiary through your advisor or directly from the insurance company.
You can also specify a contingent beneficiary to receive the proceeds if your primary beneficiary dies before you. If you have children, you may want some money to go to them. If they’re minors, you’ll need a trustee.
Note that you want to avoid making a beneficiary irrevocable because you then need that person’s permission to make a change.
The Bottom Line
You’ve taken a major leap in life. While it’s important to celebrate the milestone, it’s also important to get your finances in order. Get some life insurance quotes, see what it costs, and make the investment. It’s a product you pay for, but never want to use. However, if you need to, its value cannot be overstated.
- How much life insurance do you need?
- Insurance after marriage (life, auto, home)
- Read the fine print before buying life insurance