Jeffrey Wade
Marriage is a life-changing event, and it's important to consider how it will impact your insurance policies. When it comes to life insurance, there are a few things to keep in mind. Firstly, review and update your beneficiaries, especially if you now have a spouse who is financially dependent on you. Secondly, explore your options for combined coverage. You may be able to save money by switching to a joint policy that covers both you and your spouse. Additionally, consider increasing your coverage amounts, especially if you have a mortgage or plan to start a family. Finally, think about adjusting your deductibles, especially if your household income has increased. Marriage is a qualifying life event that allows you to make changes to your insurance policies outside of the annual open enrollment window, so it's a good time to review and update your insurance plans.
| Characteristics | Values |
|---|---|
| Life insurance beneficiary | Spouse |
| Health insurance | Cheaper to be on spouse's insurance |
| Car insurance | Cheaper to be insured together |
| Home insurance | Cheaper to be insured together |
| Long-term care insurance | Discounts for married couples |
What You'll Learn
Joint vs. separate life insurance plans
There are two types of life insurance plans for married couples: joint life insurance and separate life insurance.
Joint life insurance, also known as dual life insurance, covers both spouses under a single policy. It is usually cheaper than separate policies and helps protect your assets from taxes after you pass away. There are two types of joint policies: first-to-die and second-to-die (or survivorship) policies. In the first type, the surviving spouse receives the death benefit after the first spouse dies, but loses coverage after the payout. In the second type, the death benefit is paid out only after both spouses have passed away, and goes to the beneficiaries of the policyholders.
Separate life insurance policies, on the other hand, insure each spouse with their own policy. This means that if one spouse passes away, the other receives the death benefit payout as long as the policy is in force. Separate policies allow each spouse to focus on their unique needs. There are two main types of separate policies: term and permanent. Term life insurance provides coverage for a fixed number of years, such as 10, 15, 20 or 30 years, at a fixed cost. Permanent life insurance, on the other hand, lasts a lifetime and is more expensive. It includes a cash value component that accumulates on a tax-deferred basis, and can be tapped into while the policyholder is still alive.
When deciding between joint and separate life insurance plans, it is important to consider the specific needs and goals of each spouse. Separate policies offer the advantage of being tailored to each individual's health conditions, age, and gender. They are also beneficial if one spouse has already spent a significant amount on out-of-pocket expenses for the year, as a new joint plan would reset the deductible to zero. Additionally, if one spouse visits the doctor more frequently, they may prefer a low-deductible plan, while the other spouse can opt for a higher-deductible plan. On the other hand, joint policies are ideal for couples who want to ensure their heirs receive a death benefit, as the survivorship policy can be used for estate planning and distributing the death benefit free of federal income tax.
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Updating beneficiaries
Before getting married, this person may have been a sibling or parent. However, after marriage, you will likely want to change this to your spouse. In community property states, you will need your spouse's waiver to choose a different beneficiary. Additionally, if you have coverage through your workplace, remember to update your beneficiary for that policy as well.
Most companies will ask for a primary beneficiary and a contingent or "backup" beneficiary. While the contingent beneficiary is not always mandatory, it is often recommended to ensure your wishes are honoured. Updating your beneficiaries typically takes just a few minutes and can usually be done online.
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Exploring combined coverage
Marriage is a good time to review your insurance policies to ensure you have the best fit for your new circumstances. You can explore joint policies, but it's also worth noting that some married couples find it strategic to keep separate policies. Here are some things to consider when exploring combined coverage:
- Timing: Marriage is considered a "qualifying life event", which allows you to switch health plans outside of the annual open enrollment window. However, you may only have 60 days from your wedding day to choose new coverage, so be sure to act quickly.
- Cost savings: Combining insurance policies can often reduce costs. For example, you will likely save money by having one policy for multiple cars, and insurance companies often offer discounts for "bundling" home and auto insurance. Additionally, married couples are considered less risky than singles and may receive lower rates.
- Spouse's coverage: If your spouse doesn't already have health insurance, they may be able to get coverage through your plan or vice versa. This can be a more economical choice for some couples. However, note that some employers may charge a spouse surcharge, making it more expensive to include them on your plan.
- Usage: Consider how you and your spouse will use your insurance coverage. If one spouse goes to the doctor more often or has chronic health issues, they may want a low-deductible plan, while the other spouse can stay on a higher-deductible plan.
- Deductibles: Review your deductibles, especially if you've gone from one income to two. Increasing your deductibles is a quick way to decrease your insurance premiums.
- Employer rules: Understand the rules with your employers when considering combined coverage. Some companies have different rules for spouses, such as offering "cash in lieu" of taking insurance or restricting eligibility for the spouse's insurance.
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Increasing coverage amounts
Marriage is a significant life event that often brings about financial and lifestyle changes. Newlyweds may find themselves needing to increase their insurance coverage to accommodate these changes and protect their financial future. Here are some reasons why increasing coverage amounts is worth considering after tying the knot:
Protecting Your Spouse's Financial Security
One of the primary reasons to increase coverage amounts is to ensure your spouse's financial stability in the event of your death. Life insurance provides a death benefit payout that can be used to cover funeral costs, mortgage payments, household bills, and debts. It can also help your spouse manage living expenses and cover end-of-life expenses.
Planning for Children
If you and your spouse are planning to have children, increasing your life insurance coverage is essential. The payout can help your spouse cover child-related expenses, including childcare and college tuition. It can provide financial support during the crucial years of raising a family.
Covering Mortgage and Other Debts
If you have taken on a mortgage or have other significant debts, such as car loans or student loans, increasing your life insurance coverage can help ensure that your spouse can repay these debts without being overwhelmed. It can provide the financial means to continue with their lifestyle and maintain the family home.
Disability Insurance
Disability insurance is another important consideration for married couples. If one spouse becomes unable to work due to illness or injury, disability insurance can replace a portion of their income. This type of insurance can provide financial peace of mind and help maintain your standard of living during difficult times.
Joint Life Insurance Options
Married couples can choose between separate life insurance policies or a joint life insurance policy. Joint policies cover both spouses and can often be more affordable than two separate policies. There are two types: first-to-die policies, where the surviving spouse receives a payout, and second-to-die policies, where the payout goes to beneficiaries after both spouses pass away.
Peace of Mind
Increasing your coverage amounts ultimately provides peace of mind for you and your spouse. Knowing that you have adequate insurance coverage allows you to focus on your future together, confident that you are financially protected against life's uncertainties.
It is important to review your insurance policies and consider your specific circumstances and goals when deciding whether to increase coverage amounts. An insurance advisor can provide professional guidance to ensure that you have the right types and amounts of coverage to meet your needs as a married couple.
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Deductibles on insurance
When you get married, it's a good idea to review your insurance policies to ensure they fit your new circumstances. One aspect to consider is your deductibles.
A deductible is the amount you pay out of pocket before your insurance coverage kicks in. Raising your deductibles is one of the fastest ways to reduce your insurance premiums. If you now have two incomes instead of one, it may make sense to increase your deductibles, especially if you've built up savings that you could tap into.
Review all your policy deductibles, such as auto, homeowner's or renter's, medical and dental. If you've combined insurance policies with your spouse, you'll likely have the option to increase your deductibles. However, it's important to ensure you don't skimp on coverage just to save money.
In the context of health insurance, a high-deductible plan can be a good way to lower your premiums. However, this type of plan only makes sense if you're generally healthy and don't require frequent doctor visits or prescription medications. If you can't afford to cover the deductible or have high expected healthcare costs, a high-deductible plan may not be the best option.
Additionally, when considering the deductibles on your insurance, it's worth noting that marriage is a qualifying life event that allows you to change your health insurance plan or add your spouse. Most plans require you to make these changes within a certain timeframe, such as 60 days after your wedding.
In conclusion, reviewing and adjusting your deductibles can be a strategic way to reduce insurance costs when you get married. However, it's important to carefully consider your financial situation and expected needs to ensure you have adequate coverage.
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Frequently asked questions
Marriage changes your financial situation and responsibilities, so it's a good idea to review your insurance policies to ensure they fit your new circumstances. You can choose to combine your insurance policies with your spouse or increase your coverage amounts. You should also update your beneficiaries and explore your options for joint policies.
Combining insurance policies with your spouse can reduce costs and streamline coverage. For example, you will likely save money by having one policy for all your vehicles. Married couples are also seen as less risky by insurance companies, so you may be offered lower rates.
Married couples can choose between separate life insurance policies or a joint life insurance policy. Separate policies cover only one spouse, while a joint policy covers both. There are two types of joint policies: first-to-die and second-to-die. With first-to-die, the surviving spouse receives the death benefit after the first spouse dies. With second-to-die, the beneficiaries receive the death benefit once both spouses have passed away.
