Marriage is a big step for anyone, and it comes with added responsibility. One of those responsibilities is to provide for each other’s needs.
When it comes to your finances, life insurance is one way to do that. The coverage you get can protect your partner from a financial crisis in the event of your death. But even the general understanding that you need insurance might not be enough, so it’s important to consider your personal needs.
Why Life Insurance For Married Couples Is A Good Idea
Here are a few reasons why you and your partner should consider getting life insurance.
Long-term Planning Requires Long-term Protection
As you start your life together, you’ll want to start making plans for how you want to manage your finances. This includes setting both short-term and long-term goals.
But no matter how long you work toward your goals together, a premature death can derail your plans. Getting protection in the form of life insurance can keep the train on the tracks even if something goes wrong.
Your Partner May Be Responsible For Some Of Your Debts
If you take out a loan as joint applicants, your partner would still be on the hook for paying it off after you die. And if you live in a community property state, your partner may have to use community property to pay off your debts, even if they didn’t agree to pay them or know about them.
Community property states include Alaska (if a special agreement is signed), Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
Your Partner Would Need To Pay Other Expenses If You Die
A funeral can cost between $7,000 and $10,000 on average, according to Parting.
That might not sound like a lot in the grand scheme of things, but it can wreck your partner’s finances if they’re not prepared for it. This is why crowdfunding platforms like GoFundMe specialize in memorial funds. Medical bills can make it even worse.
Your death could also cause problems if your partner is a stay-at-home parent or otherwise doesn’t earn enough to take care of your family alone. In this situation, it’d be worth considering including an amount for income replacement in your policy.
How Much Coverage Do You Need?
There’s no right or wrong answer to this question because it depends on your specific situation and your budget.
Consider everything that you and your partner want to be covered if you die, and then add it all up. Then take add up your current assets that you could reasonably use to cover some of those expenses and subtract it to get a total.
Some things you may want to be covered include:
- Funeral and other final expenses
- Mortgage and other debts
- Monthly living expenses
- Child care expenses
- College costs
Again, you get to choose what you do and don’t want to be covered.
Work Together To Get The Right Amount
According to a study by the Life Insurance Marketing and Research Association, roughly 4 in 10 Americans wish their spouse or partner would buy more life insurance. What’s more, 12% of Americans don’t even know how much coverage their partner has.
If your partner is the beneficiary of your life insurance policy, it’s imperative that they be involved in the discussion of how much coverage you get.
After all, you’re not the one who will be left behind to fend for yourself. Have a conversation with your partner about their needs, and what they want to be covered. Then, work together to determine an amount that fits your budget.
By going through this process, your partner will have the peace of mind knowing that they have adequate protection if you pass away.
Also, consider getting coverage on both of you, even if you’re the breadwinner and your partner is a stay-at-home parent. You may want to take some time away from work to cope. And if you have kids, the long-term cost of raising is astronomical, so you may want some help.
What Type Of Policy Should You Get?
There are two main types of life insurance: term and permanent. Term insurance typically covers you for a period, most commonly between 10 and 30 years. If you die during the term, the policy pays out. But if you outlive it, you typically get nothing in return.
A permanent policy, on the other hand, guarantees coverage for life, or at least until you’re 100 or 121 years old, depending on the policy.
But that guarantee, along with a cash-value account that grows over time, comes at a high price. As a result, term insurance is typically better for most people because it’s inexpensive. If you anticipate needing coverage for life, though, consider permanent insurance.
Another policy that you might come across is called a joint life insurance policy. This policy is usually a form of permanent insurance and typically pays out when either of you dies.
But because it’s a permanent policy, you can typically expect to pay more than if you were to buy two term policies.
The Bottom Line
Life insurance for married couples is an important way to protect your loved ones and your common financial goals. So, it’s important to get coverage that’s both sufficient and inexpensive.
To get a quote, reach out to LeapLife’s team of licensed life insurance agents. They can help you shop around to make sure you get the best rate, and also answer any other questions you might have along the way.