Life Insurance

Life insurance for newlyweds: an essential addition to your post-marriage finances

Jun 21, 2023
Family celebrating newlyweds
Planning your future with a spouse is more than just choosing a honeymoon destination or picking out items for your bridal registry – you’ll also want to have a serious discussion about long-term financial security. As part of your big marriage money talk, you might be wondering if life insurance for newlyweds makes sense. Not only is the answer a resounding yes for most couples, but it can be one of the most important acts of love you do for each other.

Learn more about why married couples should consider life insurance, how to figure out which type of life insurance is best for couples, and some tips to find room in your budget for life insurance premiums.

Why life insurance matters for newlyweds

One in 10 people say if their households’ primary earners died, they would experience financial hardship within one week, while 44% said they’d struggle in less than six months, according to the 2022 Insurance Barometer Study by LIMRA.

Despite more couples relying on two incomes to get by, fewer are taking out life insurance policies: just 59% today versus 71% in 2011. Unfortunately, this could end up being a costly regret should the unthinkable happen.

That’s because when you get married, your financial responsibilities often intertwine with those of your spouse, creating shared obligations. Debts like mortgages, car payments, credit card debt, and even daily living expenses can burden a surviving spouse if you pass away unexpectedly. Life insurance is designed to provide financial security to your loved ones if the worst happens.

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How married couples can get started with life insurance

Choosing a well-thought-out life insurance policy together can alleviate such concerns, ensuring your partner has the necessary financial protection should you pass away unexpectedly. Here’s how to get it done.

First, assess your financial situation

Every couple’s financial situation is unique from income to assets to debt obligations. But even if both you and your spouse are earning strong incomes and could manage financially should the other person pass away suddenly, life insurance is still worth considering. Here’s a look at some of the key factors that can impact your life insurance decision:

  • Shared debts: Marriage often means shared financial responsibilities, including mortgages, car loans, or credit card debts. If one partner passes away, the surviving partner could be left with the burden of these debts. Life insurance can help manage these financial liabilities.
  • Dependents: If you're planning to have children, their financial security becomes a top priority. Life insurance ensures that they're financially taken care of if something were to happen to you or your spouse.
  • Single-income households: In a situation where one spouse relies on the other's income, life insurance is probably even more of a necessity. The loss of that income without a safety net could lead to financial difficulties like losing one’s home or going bankrupt.
  • Maintaining a comfortable lifestyle: Whether it's sending your future children to college, starting a business, or ensuring a comfortable retirement for your spouse, life insurance can help the surviving spouse afford the lifestyle you envisioned together, even if one person is no longer around to contribute.
  • Estate planning: Should either of you pass away, the death benefit could help cover estate taxes, ensuring that your assets can be passed on to your spouse as intended.

Pro tip: Consult with your financial advisor or a life insurance expert to help you determine the amount of coverage that aligns with your unique circumstances as a couple.

Next, determine your budget

To fit life insurance into your budget, you first need to have a clear picture of the income you have coming in and the fixed and variable expenses you have going out. The difference between the two is the discretionary income you have available to meet your financial goals, which can include paying for life insurance.

When assessing the cost of life insurance, remember that premiums vary based on the policyholder's age, health, lifestyle, and the policy type and coverage amount. Generally speaking, the younger and healthier you and your spouse are, the more affordable a life insurance policy will be. Therefore, it’s wise not to put off getting life insurance for too long.

Tips for fitting life insurance into your budget

  1. Start early: After you return for your honeymoon, set aside some time to sit down and discuss big picture financial items, including life insurance coverage.
  2. Make a decision with your budget in mind: While it's crucial to ensure your loved ones are adequately covered, you don't want to strain your budget with an unnecessarily large policy. Work with your life insurance provider to figure out exactly how much coverage you need.
  3. Reassess regularly: As your life changes, so may your life insurance needs. Regularly reviewing your policy ensures that you have an appropriate level of coverage.
  4. Live a healthy lifestyle: Smoking, excessive drinking, and a high BMI can all increase your insurance premiums. Leading a healthy lifestyle can help reduce these costs – and help you live a long life together.

Don’t forget to update beneficiaries after marriage

Already have life insurance through your employer? Once you're married, it's crucial to review and update the beneficiary designations on any existing policies or financial accounts. Many people opt to name their spouse as the primary beneficiary, but this should be a joint decision made after considering your shared financial plan.

Pro tip: Even if you have employer-provided life insurance, you might still want to supplement with an individual policy to ensure adequate coverage.

Choosing the right life insurance policy for married couples

There are two main types of life insurance: term and permanent. Term life insurance provides coverage for a specific period, usually 10, 20, or 30 years. Permanent or whole life insurance offers coverage for your entire lifetime as long as premiums are paid.

Term life insurance is often less expensive and could be a good fit for young couples just starting out. On the other hand, permanent life insurance offers additional features like cash value accumulation. Discussing your financial goals, timelines, and budget can help you decide which type of policy is best for your new married life.

Do I Need Life Insurance After I Get Married?

While everyone's situation is different, the answer is often yes. The security and peace of mind life insurance provides in protecting your spouse from potential financial hardship is invaluable. Even better, for young newly married couples, the cost of life insurance is highly affordable.

Once you say your “I Dos,” it marks the beginning of a shared journey, and part of that journey involves preparing for whatever life has in store. Life insurance for newlyweds might not be top of mind as you start to figure out your post-marriage finances, but it's an important to-do list item for building a financially stable future together.

Find out how Ethos helps streamline the life insurance process so you can easily select a life insurance policy that fits your needs.

ChatGPT was used for idea generation, but the author made significant modifications and takes ultimate responsibility for the content.

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