When you’re getting married, your to-do list extends far beyond the guest list and other details of the wedding day itself. Joining two lives under one roof means making some important decisions. As you and your spouse develop a joint plan for handling budgets and benefits, be sure to include life insurance. Now that your financial futures are entwined, policies for both of you can help provide valuable peace of mind on your journey together.
We just got married – why do we both need life insurance?
Your transition from “mine” and “yours” to “ours” applies not only to your address but to finances as well. “When you’re single, you do your own thing,” says Ed Johnson, assistant sales manager at Amica Life. “But now that you’re married, you probably have a joint lifestyle; you both support each other financially. If one of you were to pass, could you still maintain that same lifestyle you’ve grown used to if you have only one income?”
The term “lifestyle” encompasses not only a couple’s wants – such as travel – but also their core needs, such as their mortgage, student loans or other debts. In 2016, the average college student who took out loans graduated with $37,172 in debt.1
“Having life insurance in place can help take care of those financial debts should a spouse pass away,” Johnson says. Life insurance also can help provide an alternative income stream to make up for the long-term growth in retirement savings that would be lost with the passing of a spouse.
What type of life insurance best fits our needs?
Think about what you’re trying to protect with your policy. “If you’re trying to protect your mortgage, support any children you may have and cover someone’s immediate debts, then you want to select a term policy,” Johnson says. Term life insurance is designed to cover your needs for a fixed period of time, usually between 10 to 30 years.
A permanent policy, in contrast, is “just as it sounds,” Johnson says: It provides coverage for your entire life as long as premiums are paid. Like term insurance, a permanent policy can help protect your mortgage, support your children or help cover final expenses. With long-term plans in mind, it’s also good to know that permanent life insurance builds cash value over time and can help cover more long-term needs, such as making sure your estate has the liquidity to cover final and emergency expenses.
Whether looking at term or permanent, the advantage of buying policies as you start your life together is that you may be able to get higher coverage amounts at lower premiums compared to 10 or 15 years from now. “Life insurance policies are priced according to your age and health,” Johnson says. “The sooner you get it, the more affordable the policy can be. Young couples are more likely to have disposable income – since they may not have children or a mortgage yet – so it’s a great time to factor life insurance into their budget and long-term plans.”
“Young couples are more likely to have disposable income – since they may not have children or a mortgage yet – so it’s a great time to factor life insurance into their budget and long-term plans.” – Ed Johnson, assistant sales manager at Amica Life
When determining what coverage type and amount is right for you it’s important to analyze your short-term and long-term needs, as well as your budget. A life insurance specialist can help you better understand options that fit your unique needs.
What if I already have life insurance?
You’re off to a great start! Just verify that your policy still meets your needs now that you’re married. You can start by making sure your spouse is listed as your beneficiary. If they were previously listed, you’ll want to make sure the last name is updated if there has been a name change. Next, evaluate your policy’s coverage to see if it is enough for your needs. Factor in your debts, income and dreams for the future, like buying a home or raising a family.
You can use our needs calculator to help determine if additional coverage is right for you and your spouse. Whether it’s through your original life insurance policy or the addition of a new one, revisiting and updating your coverage can ensure your coverage can help provide financial security and peace of mind for your loved one.
1 Student Debt Is About to Set Another Record, But the Picture Isn’t All Bad, The Wall Street Journal, 2016.
ALIC36918 (exp. 12/19)