After getting married going on a honeymoon and having some of the most exciting times of your life you may not have life insurance on your mind. Many couples are just starting to learn each other’s finances and figuring out how to build a great financial future together. Life insurance at this time can be extremely beneficial and can help protect that future you are building together.
Young Couples Can Get The Best Life Insurance Rates
Also being young and in good health can help lock in low rates on the life insurance and save a great deal of money over your lifetime. Our life insurance agents can also help save money even if there are pre-existing health conditions. Couples will want to discuss their whole financial picture so that they can make sure they are not over or underinsured. Our agents can also help with these calculations if you are unsure as we help many newlyweds secure life insurance all the time.
Consider Your Current & Future Financial Obligations Before Purchasing Life Insurance
Sometimes couples can start out bringing savings into the marriage and others with debts (student loans, credit cards, auto loans) it is important to talk about this with each other so that the proper amount of life insurance can be calculated and will be put in place for each of you. It also makes sense to look at what future debts you will be getting together.
Will you be buying a new home with a new 30-year mortgage? A new car, adding new credit card debt for the household or now be in debt from that amazing wedding that you had? This should all be accounted for when planning for the proper amount of life insurance. When you have all the debts that were brought into the marriage and the debts you are planning for in the near future you will want to write that down. This debt amount will be added to the other amounts we will go over next.
The Primary Income Earner Matters With Life Insurance
The next thing to think about is who will be the primary income earner? This is important so that it can be determined if both of you should have the same amount of life insurance coverage or possibly a different amount for each of you. Many couples when they are first married will want to look at covering their income over at least the next 10 years.
The way we calculate the multiple of income is if you make $40,000 per year multiply that by the 10 years you would need the income replaced for and that would be a minimum coverage amount of $400,000. Think if you did not have one of the incomes coming into the household any longer how would your partner manage? They would still have all of the same bills and daily living expenses. Like the mortgage, utilities, food cost, living expenses and also final expenses if one spouse were to pass away.
Life insurance will give you the peace of mind that either of you would not have financial stress while dealing with the stress of losing a partner. If you are calculating these figures yourself right down the minimum of 10 times each of your incomes so you will be able to total up the correct amount of coverage.
How Children Affect Life Insurance For Newly Married Couples
Often times as newlyweds we also think about having children in the near future. Raising children has many new expenses to think about. Not only will you have the extra daily living expenses of the children in the household but you will also have to consider how high the cost of education will be as the child grows up. Daycare can be a high cost as well and something to consider. If one spouse is staying home to take care of the children you will need to look at how much extra cost placing the children in daycare will add if that spouse passed away so that the working spouse can get back to work after this tragedy.
It is said on average it can be over $200,000 to raise a child plus you would have to figure at least another $100,000 or more for college costs. So if you have young children or are just planning on having children you should have up to about $300,000 of coverage per child so that not only will the living spouse be able to cover all of their living expenses but also not have to worry about how they will help them with college. You will want to write that down so you can add the three figures we went over and figure a total amount of coverage each spouse should have.
Not having the proper amount of life insurance can leave the living spouse not able to pay all the bills and the children possibly not having enough money to continue their higher education. Most newlywed couples will want to figure this into their life insurance planning since many newlyweds will lock in the life insurance over at least the next 30 years in order to save the most amount of money possible on their life insurance. Next, we will talk about the types of life insurance most newlyweds will consider.
Types Of Couples Life Insurance For Newlyweds
As a newlywed should I look at term life insurance or permanent life insurance?
Most newlyweds will want term life insurance since it will offer the most coverage for the least amount of money possible. The way that term life insurance works is you will set the policy to have a level face amount and premium over the next 10-30 years. Most life insurance companies will offer 10-15-20-25-30 year options that you can lock in so this is what you will see most often online. The shorter the term the lower the price will be for the life insurance policy. If you decide you will only lock in a 10-year life insurance policy as a newlywed and think I will just get a new 10-year policy every 10 years when the life insurance policies expire. This way of thinking may end up costing you a great deal of money.
Here is what can happen. You are currently young and in great health so this is when the rates will be best for you and the insurance company will let you lock in the rate based on this excellent health. Now 10 years down the road you go apply for a new life insurance policy and you are on a new medication or have had some health issue during that time. This can make it so that you may not be able to get approved for a new policy leaving your family without the protection that is so important to you. If approved it can be extremely expensive now costing you a great deal more than if you had just locked in the proper term when you first got coverage. Plus you avoid the hassle of having to take another health exam for the new coverage every 10 years.
If you have young children and a new mortgage most newlyweds will consider having a 30-year term in place. And don’t worry if you ever need to change or add more coverage during that 30-year time span there will not be a penalty if you need to cancel that existing policy anytime. After the 30-year term ends most families will not need as much coverage any longer since the children are now supporting themselves and the mortgage has been paid off. At this point, some families may want some coverage still for covering final expenses and that is when most people will lock in a smaller permanent life insurance policy for the rest of their life. This way your family will not have to come out of pocket to cover final expenses when the time comes.
Permanent life insurance just means that the life insurance face amount and the premium will not change for the rest of your life. If your family decides that it is important to have some permanent coverage when you are starting out some newlyweds will look at locking in a large portion of their insurance as a term policy and then some as a permanent so it will continue after the term life insurance ends. Our agents help clients shop for the best rates on term life and permanent life insurance so we can show you all of the best options to meet the needs of your family.
Apply & Find the Best Couples Life Insurance Rates
Now that you have an idea of the amounts of coverage each of you should have as a newlywed you will want to find the insurance company that will give you the best policy and rates. It is important to look at companies with excellent financial ratings. Many life insurance shoppers will use the A.M Best ratings as a guideline to see how well the company is doing financially.
Most customers want to make sure that the company has an A or better rating financially. Also, it is important to have a highly experienced independent life insurance agent working for you so that they will know what companies will underwrite you best and be most competitive based on your health and lifestyle profile. If you call a company directly you are only getting that companies rates and they may not be your best. By using an independent life insurance agent they will look at many different top life insurance companies for you finding the best policy and rates for your family.
Spectrum Insurance Group is made up of life insurance agents who are licensed in all 50 states and the District of Columbia. Spectrum Insurance Group has helped 1000’s of consumers purchase life insurance online & over the phone.
All content on this site has been written by life insurance experts & licensed life insurance agents.