Getting married this year? Congratulations! It’s important to protect your now growing family. Life insurance is a large part of that — making sure your family is financially protected if the unexpected happens. Once you’re married, your safety net might not be complete unless your spouse also has a life insurance policy. Spouses can save time and hassle by shopping for policies together (even before the wedding!) to protect their family’s future.
Whether you’re shopping for life insurance alone or with a spouse, there are a few things you always have to do.
Calculating your life insurance need
It’s important to know how much life insurance you actually need, in terms of both coverage amount and term length.
The best way to take this is to take a needs-based approach and calculate your financial obligations. This involves taking into account:
Childcare and care for other dependents (like aging parents)
Debt (unfortunately, co-signed debt survives even death)
End-of-life expenses (e.g., funeral expenses)
Financial cushion for the family (e.g., replacement income)
See here for more information on how much life insurance you need.
Choosing a beneficiary
The beneficiary is the person who will receive the death benefit in the event that the policyholder dies. Most spouses shopping together will choose their partner, but you may choose your children or even an institution, like a charity or museum.
Policyholders can choose multiple beneficiaries, or pick a primary beneficiary and a contingent beneficiary.
Deciding between term vs. whole life insurance
You will also need to decide if you need a term life insurance policy or a permanent policy, like whole life. Term insurance is cheaper but expires after a certain number of years; whole is more expensive but doesn’t lapse and includes an interest-gaining cash value component.
Here’s a breakdown of whole versus term life insurance.
Picking a life insurance company
Depending on the health status of both you and your spouse, you should take into account what insurance companies you’re considering. Some are better than others at accommodating health conditions like diabetes or high cholesterol and provide lower premiums for applicants with those conditions.
Separate vs. joint life insurance policies
One unique factor in shopping for life insurance with a spouse is the decision to buy two separate policies — one for each of you — or a single joint policy that covers both of you. Here’s the difference.
The most common way for spouses to buy life insurance is to buy two separate policies at the same time. Unfortunately, while this bulk purchase doesn’t result in lower premiums, there are still some benefits:
You can tailor each policy to each spouse’s needs. For example, you may want the breadwinner to have more coverage than a stay-at-home spouse, or you may want only one person to have riders that offer extra provisions, like early access to the death benefit.
You can schedule a joint medical exam. This is part of the underwriting process, when a medical examiner will perform a physical to get an idea of your current health. You can have the technician come to your home or place of work at your convenience.A joint life insurance policy is one policy that covers two people. They can be term or permanent policies. The main consideration is if you want a first-to-die or survivorship policy.
In a first-to-die joint policy, the policy will pay out upon the first policyholder death. If the surviving spouse wants coverage, they’ll need to apply for another policy.
With survivorship life insurance, also known as a second-to-die policy, the policy doesn’t pay out until both policyholders are deceased.
Separate term policies are typically the best option, because they’re cost-effective and provide flexibility in terms of how long each policy lasts and what customizing riders each policy has. But joint life insurance can be convenient because there’s only one policy throughout the process.
The best life insurance for married couples will depend on the individual circumstances, so you should talk to a licensed expert about whether separate policies or a joint policy is right for you and your spouse.
Learn more about the types of life insurance here.
Can you take out a life insurance policy on your spouse?
One final consideration: Can you buy a life insurance policy for your spouse without involving them, or vice versa?
The answer is no, because there are several hurdles involved. First, if you’re taking out a life insurance policy on someone else, you need to demonstrate insurable interest — that is, proof that you would be financially burdened if that person died. It’s what allows business partners to take out policies on each other.
Second, you’ll need to get through the entire underwriting process. That means knowing all of the person’s health and identifying information. Even if you have all that, you’d need to apply for a no-medical exam policy or else the person will have to take the paramedical exam.
Finally, the person would need to sign the policy and give consent. Unless you’re willing to commit fraud, you’ll need to bring your spouse into the process at some point.
While life insurance is a serious thing to think about in the midst of wedding planning, it’s important to discuss finance with your partner and any financial considerations for the future. Here’s how couples can do money better together.
This article originally appeared in Policygenius and was syndicated by MediaFeed.org.
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