While it isn’t the most romantic aspect of marriage, it’s essential to have a conversation about finances, including how to handle financial responsibilities and obligations once one spouse has passed away.
If a spouse should die prematurely, their remaining family may have to deal with a financial crisis on top of their grief.
In this article, we’ll discuss the importance of buying life insurance as a married couple, what type of coverage to buy, and how much.
Quick Article Guide:
- Why Every Married Couple Should Consider Life Insurance
- Why You Shouldn’t Wait Until Ever After to Purchase Your Life Insurance
- Know Your Options for Life Insurance As a Married Couple
- Questions? We Can Help!
With just one income, the surviving spouse may have trouble supporting the family. Expenses like mortgage, loans, and car payments or other debts can become overwhelming. The best way to give your spouse and family financial security after you’ve passed is with a life insurance policy. Whether you’ve just tied the knot or have been married for years but haven’t broached the topic, it’s time to start considering life insurance for married couples.
With a life insurance policy for married couples, each spouse can name the other as the beneficiary, so if one dies, the other will continue to have financial security, stability, and support from the death benefit payout. Additionally, a couple’s children can be named as beneficiaries, so if anything should happen to both of their parents, they will still be provided for financially.
Even though the possibility of tragedy might seem distant or minimal, it’s important to be prepared, especially when it comes to your loved ones.
You may not think you need life insurance now – you just got married and you’re in the prime of your life, right? But the sooner you buy your life insurance, the cheaper it will be. The healthier and younger you are, the less you will have to pay for your premiums and the higher likelihood you have of getting approved.
When you apply for life insurance, the life insurance company that’s providing your policy will look at your age and health when calculating your monthly premium amount. They will ask you several questions about your health (medical history, chronic conditions, weight, etc.) and may even require a medical exam to determine your rate class. The healthier you are, the better your rate class and the less risk you pose to the insurance company, which means the less you’ll have to pay for your premium.
It’s also important to purchase your life insurance early on in your marriage because the more you grow as a couple, the more you’ll accumulate financial responsibility and sometimes debt. There may still be debt from paying off the wedding, or in a few years from now, you may be looking at purchasing a new car or home.
It’s better to be prepared for those expenses now. In the event of your death, your spouse would be left paying for those obligations on his or her own with a single income.
The payout from a policy’s death benefit can also be used to cover funeral or other post-death expenses. It can also be used to replace your income for a few months or years to help support your spouse as they grieve and get back on their feet. Life insurance is just another way for you to give your family peace and security even if you’re not around.
Just like you had to search for the perfect spouse, the perfect life insurance policy is out there as well. An independent insurance agency like Term Life Advice works with dozens of companies and can help find you the policy that will best fit your needs.
Each policy has its own advantages and disadvantages, so it’s important to discuss the type of coverage you want and the goals you want your policy to accomplish.
Types of Life Insurance Policies
There are several options when it comes to types of life insurance policies; the most common are term life insurance policies and permanent life insurance policies.
Term life insurance offers coverage for a pre-determined period of time. Terms are typically purchased for 10, 20, or 30 years. Once that period is up, the policy is expired and you’d have to purchase a new policy to remain covered.
With permanent life insurance, the policy remains effective as long as you make your monthly premium payments. These types of policies can also build cash value, which has certain tax benefits and can be used if you need to take out a loan.
Besides the more common policies, there are several other options for life insurance. Joint life insurance policies cover two separate policyholders; these types of policies are typically broken into two categories: a first-to-die insurance policy or a second-to-die insurance policy.
With a first-to-die insurance policy, the death benefit is paid out when the first spouse passes away; once it’s paid out, the policy is no longer effective. On the other hand, a second-to-die insurance policy is paid out when both spouses have passed away; the death benefit is typically paid to their children to cover any living or post-death expenses like mortgages or funeral costs.
Life Insurance Coverage Amount
Deciding on the type of policy that makes the most sense for your family is just the first step; you also have to consider how much you want your policy amount to be. Typically, policies start as low as $25,000, but they can range into millions of dollars of coverage. The larger the policy amount, the more costly the monthly premium, so it’s important to find a balance between coverage amount and what you and your spouse consider to be comfortable and affordable monthly payments.
When deciding on a coverage amount, you should take your debts into account. If you were to pass away, what debt would you be leaving for your family to pay off? After you calculate your current debts, you should have a decent idea of how much coverage you would need to keep your family stable in the event of your death.
Your current income is another factor to consider. How many months of replacement income would your family need to feel secure? Does your spouse or children have supplemental income to get by or are they solely dependent on the income you bring home?
The other factor you should consider is that number of people that would suffer from losing you and your salary. Do the two of you have children that would struggle to get by?
Every couple will have a different situation and different needs when it comes to life insurance. Working with an independent agent like Term Life Advice gives you more options. We represent more than 60 top-rated life insurance companies, and our agents are fully licensed to help you find exactly what you, your spouse, and family need from a life insurance policy.
Call us today, toll free, at: 855-902-6494 to get started, or request a free quote online below to instantly compare rates from dozens of companies.