Just Got Married. What do I do?
Thank you for reading my article today. I am writing why Life Insurance is important for married couples. Buying life insurance soon after getting married protects your financial future and can save you money long-term. When you're building your life with someone else, the foundation that the two of you are laying may need the protection that life insurance for married couples provides.
Here are some reasons to consider life insurance when you’re a married couple and some options for policies.
1. There Are Added Expenses
Couples often use their combined incomes to take on bigger financial obligations, such as renting a nicer apartment, buying a home or new cars and, possibly, having children. Many couples wouldn’t be able to bear these costs on just one income. One of the primary reasons for buying life insurance is income replacement, so that your family can continue their plans and lifestyle.
2. You Do Not Want to Burden Your Spouse with Your Debts
Any debts left when you die would be paid out of your estate, meaning your assets. This will eat into what you pass on to your spouse.
Your spouse would be on the hook for debts in any joint accounts. Also, in community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), your spouse would be responsible for debts you took on after getting married, such as personal credit card balances.
3. Life insurance gets more expensive the longer you wait
The earlier you buy a policy and lock in life insurance rates, the more money you'll save over the long run. The prices you'll be quoted for policies will get more expensive with each passing birthday. On top of that, you never know when you might develop a medical condition that could lead to higher rates when you want to buy a policy.
How Much Life Insurance Do Married Couples Need?
We recommend getting 10–12 times your annual salary. If you die, your spouse will take the lump sum they receive and invest that amount into mutual funds that average at least 10% growth. The interest your family takes out each year would cover your annual salary. The original amount could stay there forever, and they could live off of the interest.
Options for life insurance for married couples:
Once you’ve decided to buy life insurance, the question becomes what kind of coverage to buy and how much you need. Your decision generally depends on what financial obligations you want to cover, how long those obligations last and how much you want to spend.
Term Life Insurance
Term life insurance is suitable for many needs. It promises to pay a set amount if you die while the policy is in effect. You decide how much the payout would be and how long the policy should last. You can time a term life insurance policy to match a financial need. For example, if you want to make sure your spouse has a way to replace your income for the next 10 years, you can buy a 10-year term life policy in an amount that would match the income. Term life is the most affordable way to buy life insurance protection.
Full Life Insurance
Permanent coverage, such as whole life insurance, lasts your entire life and builds cash value. It is good for people who want to provide money no matter when they die, such as funds to pay for a funeral. Because you can take a loan against the cash value, it can also be used as a source of funds later in life.
Most married couples are better off buying separate term life policies for their affordability and simplicity. Joint life insurance tends to be pricier and some types of joint insurance don’t pay out until both spouses die, leaving one partner unprotected if the other predeceases them.
Hope this article gives you insight. Thanks for reading and have a great day!