Congrats on Getting Hitched!
Now, Help Protect Your Spouse With Term Life Insurance
Today we have a very knowledgable guest writer, Tim Grenda, giving us the low-down on term life insurance:
Thank-you cards written and dropped in the mail: Check. Wedding dress packed up: Check. But have you helped protect your new spouse’s financial future? While you are getting settled into your newlywed routine and exchanging all those wedding presents you got but don’t really need (“honey, why did we register for three toasters?”), consider adding “Buy Term Life Insurance” to your newlywed checklist. For less than you probably pay for Starbucks each month, you can help provide financial support for your new spouse, plus any children you might have in the future and other loved ones, in the event you suddenly die. For example, a healthy 40-year-old man can get $250,000 of term life coverage for just over $15 a month, while a woman the same age can get the same coverage for even less – about $13 per month. Any way you cut it, life insurance is affordable, reliable coverage that newlyweds can count on to be there when they need it.
What is Term Life Insurance?
Term life insurance provides a specified amount of coverage for a pre-defined period of time. The monthly premiums can be fixed for that period and depending on the specifics of the policy, the amount of the death benefit may stay the same for as long as 30 years.If the policyholder dies during the term in a manner that is covered by the life insurance policy, the surviving spouse or whoever is designated as a beneficiary is paid proceeds in the amount of the policy. If a person outlives their life insurance policy, the policy expires and the policyholder simply stops making the monthly premium payments. Or, if they choose, they can buy a new term life insurance policy. One benefit of life insurance is that it generally is less expensive than whole or universal life policies, which can provide financial protection for a person’s entire life and offer cash value and other features. For newlyweds who are just getting started in life together and planning their financial futures, term life insurance often is the best and most affordable life insurance option.
Do Newlyweds Really Need
Life Insurance?
When you are relatively young and just starting out in life, you may be convinced that you don’t really need life insurance. Most newlyweds have not yet purchased a house, had children, or accumulated a lot of debt. But even so, having term life insurance can be an important part of any newlywed financial plan.Proceeds from a life insurance policy can be used to: - Pay debts, such as student loans, mortgages and equity loans, car loans, and credit cards.
- Cover funeral costs and other final expenses, including medical bills and estate taxes.
- Set up an emergency fund for unexpected job losses or accidents.
- Create a college fund for your future children's educations or a surviving spouse's retirement.
- Establish a nest egg to provide income to your surviving spouse to ensure that your family can maintain its current standard of living after you are gone.
Why leave your spouse, children, or others saddled with large debts such as mortgages, school loans, or credit card bills if you died? Take care now to help shield your new wife or husband from financial problems in the event you suddenly die. In particular, newlyweds who are carrying significant credit-card debt or mortgages might find that buying life insurance shields them from unwanted transfer of these individual debts in the event one of the spouses dies. In most states, joint property rules apply to married couples. Should tragedy strike, the debts, in addition to the assets, are transferred to the surviving spouse. Having life insurance can help cushion that financial blow.
Buy Life Insurance
While You’re Young, and Save
An advantage to buying life insurance as a newlywed rather than later in life is that you generally pay less for a policy when you are younger and in good health. If you wait even a few years to buy term life insurance coverage, you likely will pay more in monthly premiums. If you develop medical conditions in the meantime, you may have a hard time finding life insurance at any cost, so the time to act is sooner rather than later. Why wait any longer to take the first steps toward helping protect your loved ones’ financial future?
How Much Term Life Insurance
Do I Need?
Even newlyweds who know they need life insurance may be unsure about how much coverage is enough. It’s a good question with a tricky answer, because it depends on many factors.The amount of life insurance that a newlywed couple (or anyone else, for that matter) may need depends on several things, including:
- The amount of your current and future debts, such as mortgages, school loans, and credit cards.
- The current and future income of you and your spouse.
- Whether you plan to have children.
- The standard of living you want your spouse and other loved ones to maintain after you are gone.
A general rule of thumb for how much life insurance you will need is equal to about eight times your combined annual income. Many newlyweds and others shopping around for insurance find it helpful to use a term life insurance calculator to better determine their individual coverage needs before they buy.
Make Term Life Insurance Part of Your Newlywed Financial Plan
Being a newlywed is definitely an exciting time, as you turn the page to a new chapter in life and prepare to spend the rest of your life with a new partner. Putting together a solid financial plan may not sound like as much fun as picking out a china pattern or paint colors for the walls of your new home, but it’s far more important to your marriage’s long term financial future.Life insurance can be an important piece of a newlyweds’ fiscal plan, helping to providing needed financial support to a spouse, child, or other beneficiaries in the event of a sudden death. When you got married, you promised to love and protect your spouse in sickness and in health, for as long as you two shall live. Help keep that promise by buying term life insurance.
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