These days getting married brings about the joining of couples of many different circumstances. Of course there is the ever-traditional young couple fresh out of college who might have no other financial obligations other than student loans, rent and their vehicles. There are usually no children involved and life is just full of possibilities and opportunities that will be built together. Assets as well as bills will be accumulated as a couple.
On the other hand, there are now many couples who are remarrying for the second or third time and this is where things get more complicated. As newlyweds who are marrying for the second or third time are usually older, there is not only a blending of many collected assets and bills but more than likely a blending of children from both the husband and wife. There may even be dependents such as elderly parents who are being taken care of by either spouse.
In either scenario, starting a new life with someone not only brings on many emotional and personal changes but also a whole new spectrum of financial responsibilities. These new obligations, especially when children are involved, beckon for financial security if the unspeakable should happen – the loss of either spouse.
While no one likes to think about familial loss, especially when your new life together has just begun, it is important to plan ahead. Term life insurance is the most cost efficient way to plan for unpredictable loss. For young couples just starting out, term life is an inexpensive way to gain financial protection. Even if insurance seems unnecessary for a young couple where both partners are both working and there are no real financial obligations, it is actually the best time to buy since term life insurance is cheapest for the youth.
For those couples blending finances and children, purchasing a term life insurance plan is a “quick fix” until the whole new family situation can be assessed more thoroughly. As your true needs reveal themselves, you can change your plan accordingly. It is therefore important to make sure the policy you buy is convertible. If you already have existing life insurance, make sure you change the names of beneficiaries accordingly.
Some Tips for Newlyweds
For couples planning on having children it would be ideal to buy a term life policy that will keep your family covered until the children graduate from college. For the longest protection it would be advisable to purchase a 20 or 30-year level term policy. Level term policies stay unchanged from the original purchase price. The longer the coverage, the more costly the premiums, however, level term is still the most inexpensive coverage you can purchase. This is the best way for young couples or new families to get started.
The rule of thumb for purchasing coverage is usually 10 times your annual net income. However, the face value will obviously vary depending on your age and number of dependents you have now inherited or plan to have down the line. Only you can decide what your family would need.
While it seems tempting to rush off and buy the least expensive policy, especially as a short term alternative until your settled family’s true needs are revealed, it is important to make sure you go with a carrier that is “A” rated. Your best bet is to find a reputable broker who can advise you properly, especially if buying a level term policy. You want to make sure you buy a policy that is convertible, renewable and comes with a guaranteed period.
Certainly buying term life insurance may not seem a very romantic thing to think about as a newlywed, but in reality, coverage that protects you and your spouse against life’s unforeseen events is an important part of planning your life together. Assessing and addressing your insurance needs early on will help get your marriage off on the right financial footing.
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