You know the old playground song: First comes love, then comes marriage, then comes a comprehensive financial plan for the future that includes an affordable term life insurance policy.
Okay, maybe that’s not how it goes, but it should. Kids these days, right?
People use the birth of a baby as the benchmark to finally buy life insurance. While that’s a pretty solid way to go about it, there’s one life event that could make an even better checkpoint: marriage.
Marriage is the perfect time to start shopping for life insurance because it’s when you start sharing your life – and your debt – with the one you love. Insurance promises are usually missing from wedding vows. But now’s the time for you and your spouse to review your coverage. Having the right type and right amount of life insurance coverage will help ensure that your finances are protected. Here’s why life insurance for married couples should go hand in hand with saying, “I do.”
It’s better to get started earlier
While planning your future is more or less a choose your own adventure scenario in which you can do many things in many different orders, broadly speaking, people get married before they buy a house or start having kids. That makes it the perfect time to start your financial safety net and start planning for the future.
The earlier you buy life insurance, the more affordable it is. Life insurance premiums increase with age, so you’ll only be adding to your monthly rates if you wait. Rates are locked in when your policy goes in-force, meaning that you’ll pay the same each month for the life of the policy. Say you get married when you’re 30; at that age, a healthy non-smoking male can get $500,000 of coverage for a 30-year term at about $46 a month.
Meanwhile, for the same policy, he would pay around $59 a month if he waited until he was 35 – or about $87 a month if he waited until he was 40. Over 30 years, that really adds up. If marriage is the first item checked off of your adulting list, it makes sense to buy life insurance, too.
You also typically have fewer financial obligations the younger you are. If you wait to have a kid, you have those costs to deal with (and kids can be expensive) on top of life insurance premiums. Plus, maybe you upgraded to a home or a bigger vehicle to handle your bundle of joy; those are just more added living expenses. By getting started on life insurance sooner, it’s more affordable and you have more time to build it into your budget.
You’re planning for the future
A strong financial future starts with a strong foundation. You’ll have a lot of things to consider going forward – how much you can afford to pay for a house, how you’ll be able to budget for the number of children you and your spouse want to have, how you’ll save for retirement – and every one of them can be derailed with an untimely death. Life insurance takes that worry off the table, and is a great start to showing you care about your family’s future.
Life insurance is an affordable way to start planning for the future. There’s nothing harder than the first step when it comes to forming good habits, and by setting your family up with a financial product that will be there for decades to come, it’s an easy way to get on the road to other habits. If you can train yourself to put aside money for life insurance each month, it becomes easier to look at other forward-thinking financial plans, like saving for a home down payment (or any big purchase), starting a RESP plan for future university expenses, or contributing to a retirement account. Plus, that term life insurance policy protects all of those other financial plans.
Getting started early with life insurance shows that you’re serious about getting your financial house in order long term, and it can save a lot of headaches and arguments between you and your spouse going forward.
You’re sharing debt
“What’s yours is mine” is never truer for married couples than it is when it’s concerning their debt.
You or your now-spouse can bring all sorts of debt to the table. Maybe that pesky student loan debt is still tagging along. Maybe you’ve gotten an early start on homeownership and now you’ve got a mortgage. Or maybe you both just rack up credit card debt pretty quickly (but are working on paying it off, obviously).
The point is, your family can be on the hook for a lot of different things. While life insurance is important to ensure that your family is set up for the future, it should also be used to make sure the past won’t come back to haunt your survivors or surviving spouse. Not all debt can or will be passed on to your family, but if any is, you want them to be able to pay it off.
Life insurance for married couples
Okay, so you need life insurance. Or maybe it’s your spouse who needs it, and you’re just being a dutiful partner and helping out with some of the research. But do both of you need it?
Maybe, and you have a few options here.
First, though, you’ll need to decide if you both actually need term life insurance. Life insurance acts as income replacement, so you want that to be the focus: Figure out the expenses you need to cover, the income you’ll need to replace, and decide what policy (or policies) will help you do so.
But don’t discount the value of a stay-at-home spouse. Even though you primarily want to replace lost income, think about what expenses losing a stay-at-home spouse would add. They cook, clean, take care of the kids (or will, eventually), and more. If you need to, for example, start paying a live-in nanny to take care of kids so you can continue working, you’ll want that cost included in your life insurance needs, and one way to do that is to get a life insurance policy for the stay-at-home spouse, too. Stay-at-home spouses can typically get a policy that matches the coverage of the breadwinner, effectively doubling your family’s protection.
Getting married is the start of a brand new chapter in your life. But that doesn’t mean you should ignore what came before or put off what’s coming soon. By buying life insurance when you get married, you’ll have an affordable bedrock for your financial future – and your marriage.