June marks the start of wedding season. Along with a lifetime of happiness comes a lifetime of responsibilities. You promise to love and cherish one another through thick and thin. You promise lean on one another through physical, emotional, and financial hardship.
During the ceremony, you hear the soon-to-be-spouses promise these things “until death do us part.” But why stop there?
Life insurance is a must-have for married couples. This act of love ensures promises are kept even after “death do us part”. Here's why married couples should consider buying life insurance:
1. You're Blending Finances
As a married couple, you are likely sharing responsibility of bills. The combined income also allows more flexibility for a nicer home or maybe a new car. One of the main reasons behind buying life insurance is that it replaces income.
If one of you dies, the life insurance death benefit will ensure you can continue your standard of living. While you downsize your home anyway, you won’t be forced to sell it quickly and potentially lose money on it.
2. You May Want to Start a Family
Sure, if you are both financially independent and well-off, there's a chance you might not need life insurance. However, if you plan on having children, life insurance is a no-brainer. If you marry with no children, and your spouse dies, it would be hard to pick up the financial pieces again without life insurance, but you can do it. You only need to afford one person. If you are married with children and your spouse dies with no life insurance… this is a whole different situation.
Your children rely on you for everything. If your spouse dies unexpectedly, you can’t ask your toddler to help pay the mortgage. It’s all on you. With life insurance, you will still be able to put food on the table, a roof over your child’s head, and afford to send them to college. Life insurance is lifesaving.
3. The Sooner You Buy, the Cheaper It Is
Ah, young love. Couples on their wedding day are often in prime health — emotionally and physically. Did you know that age and health are the top two factors that affect life insurance pricing? The younger you are, the further you are (statistically) from death. This means life insurance carriers don’t see you ask a high risk and let you pay less for coverage. Ditto with how healthy you are.
Buy life insurance sooner rather than later and lock in low premiums.
In the U.S., the average age when people get married is 29 for men and 27 for women. Let’s see an example on how much life insurance would cost for the average couple.
Example: John and Jane Smith are newlyweds. John is 29 and Jane is 27 and both are relatively healthy individuals. They both decide to apply for $250,000 in coverage with 30 year terms. They want to start a family soon. Coverage for 30 years keeps their family financially safe from the unexpected until their children are independent.
John’s premium cost for a 30-year term policy with $250,000 in coverage can be as low as $21 per month. Jane’s monthly premium cost for a policy with the same features can be as low as $17 per month.
Married couples typically will either name each other beneficiaries of their policies or own coverage on each other.
|Option 1: Owning One’s Own Policy||Option 2: Owning Policies on Each Other|
|Policyowner: John Smith||Policyowner: Jane Smith||Policyowner: Jane Smith||Policyowner: John Smith|
|Insured: John Smith||Insured: Jane Smith||Insured: John Smith||Insured: Jane Smith|
|Beneficiary: Jane Smith||Beneficiary: John Smith||Beneficiary: Jane Smith||Beneficiary: John Smith|
If you are the owner of your own life insurance policy, it will become part of your taxable estate when you die. And if your net worth, including life insurance, is relatively high (in the millions) owning life insurance on each other (option #2 of above chart) is best so it’s not included in your estate.
If your spouse is the beneficiary of your policy, then the proceeds would be safe from federal estate taxes by the marital deduction law. The marital deduction law allows married couples to transfer an unlimited amount to their spouse without an estate tax hit. However, the surviving spouse does not get this privilege when transferring his/her estate to their beneficiaries, such as children or grandchildren. Keep in mind each state has different laws regarding estate taxes and the marital deduction law applies to federal estate taxes only.
Are you planning to marry soon? Or maybe you already have a spouse. It’s time to think about getting life insurance to make sure you and your loved ones protect yourselves from the unknown.
This article originally appeared on Quotacy.
Natasha Cornelius is the content-writer and social media manager for Quotacy.com, an online life insurance agency. Their aim is to make life insurance easy to understand and to help you get life insurance coverage to protect your loved ones. Get a term life insurance quote from Quotacy.com. No personal information required.