5 concerns that newlyweds have regarding life insurance.John Sanders
Life as a newlywed has many exciting aspects, especially when you’ve just experienced the thrill of a wedding and honeymoon. While you may be eager to get settled into a new routine, you may also be aware that you and your partner still need to make some future plans.
Making a solid financial plan for the future should be high on your priority list, even though it may not be the first thing on your mind as a newlywed. Additionally, planning for risk—and considering what could go wrong, even if it’s uncomfortable—should be part of your financial strategy. That usually entails purchasing life insurance.
Five Life Insurance Questions Asked by Newlyweds
Young or old, financially secure, or just starting out, newlyweds frequently have the same questions about their new marital status. So let’s examine five frequently asked questions (FAQs) about life insurance that newlyweds have.
- How much life insurance do we need?
- What type of life insurance do we require?
- Is life insurance necessary if we don’t have children?
- Can we afford to purchase life insurance?
- What is the purpose of life insurance?
How Much Life Insurance Do We Need?
A few crucial factors will determine how much life insurance you require for your newlywed life.
- First and foremost, it will be determined by all of your financial obligations. What obligations and debts would each of you leave for your partner if you both passed away? A good place to start when determining how much life insurance you require is by making sure those costs and obligations are met. Mortgage, auto loan, student loan, credit card, and other personal debts might be on your list.
- The next step is to determine how much money your spouse depends on you to bring in annually. Does that income need to be replaced if you die? This calculation must be done by both partners before purchasing individual policies to safeguard one another. Along with monthly, yearly, and incidental financial events, your calculations should take into account your regular expenses.
- Finally, you might need to use your life insurance to make future plans. If you have children or other dependents, you and your spouse should take into account any costs associated with those expenses as well as any retirement funds you might lose in the event of your spouse’s passing.
What type of life insurance do we require?
The kind of life insurance a newlywed needs will depend on their budget and the scope of their insurance needs. You might only require insurance to pay for funeral expenses and other necessary living expenses in the event that your partner passes away. However, you might also require more complex financial planning.
To meet your specific needs, you and your partner can select from a wide range of life insurance products offered by numerous insurance companies. However, most can be defined as either term or permanent life insurance.
- Term insurance is life insurance that you purchase for a predetermined time frame. A specific sum of money will be given to your spouse (or another beneficiary) as a death benefit if you pass away during that time.
- Permanent life insurance does not have a time limit like term insurance. It continues to protect you for the rest of your life and can offer both a cash value and a death benefit. There are still affordable options available, even for young, newlywed couples just getting started, even though a permanent policy may cost more.
Is life insurance necessary if we don’t have children?
The desire to continue supporting their children financially in the event that one partner passes away is a common justification given by couples for purchasing life insurance. So what if you don’t have kids? Do you still need life insurance?
The typical response is still “yes.” Let us look at two instances.
No children yet, but later perhaps?
- Purchasing life insurance prior to having children is still a smart move if you don’t currently have children but may want to in the future. To begin with, the younger you are, the cheaper life insurance rates are generally. Thus, purchasing a policy now might help you maintain lower rates for longer.
- Also, you must be in good enough health to qualify for life insurance before you can purchase it. By purchasing a policy now, you can make sure that you’ll have taken care of the risk and be covered if a future health issue renders you uninsurable.
No children now… and probably never.
- Even if having children is not in your plans, you should still consider getting life insurance for your partner. This is true until both of you are financially stable enough and have enough savings to take care of all of your expenses in the event that either of you passes away. Additionally, if you have any other dependent family members, you might want life insurance. You might even want it for charitable purposes.
Can we afford to purchase life insurance?
There is a policy available for almost everyone in the vast world of life insurance. The majority of couples are shocked to discover that life insurance is more affordable than they might have thought. Recent studies show that 8 in 10 millennials overestimate the cost of life insurance, often by a factor of five compared to the actual cost.
Determine the amount of life insurance you believe you need first. If you still can’t find a policy with a premium level that fits within your spending limit, consider starting out with a smaller amount of coverage and gradually increasing it. A little life insurance is better than none, as the saying goes.
What is the purpose of life insurance?
Life insurance is an additional way for newlyweds to express their love and concern for their spouse. In the event of your passing, you are giving them a means of support so they can continue living and taking care of others. The weight of grief is heavy enough without the added burden of financial stress.
Furthermore, you can use life insurance as a tool for financial planning. You can create a life insurance policy that offers more than just a death benefit by working with a licensed insurance agent. If you choose a permanent policy, your life insurance may include cash value, a critical illness clause, or even long-term care benefits.
While it’s fun to get swept up in the excitement of a new marriage, it will pay off to keep in mind the importance of laying a strong financial foundation. Now is an excellent time to speak with an experienced agent to ensure that you and your spouse have all of your life insurance questions answered.
We send our newlyweds our best wishes for success in your new marriage!