Getting married is one of life’s biggest milestones.
Of course, it’s also the point in your life when you begin planning and dreaming for you.
Marriage means accepting responsibility for another life. Once the honeymoon is over, it’s time to get back to real life and what that responsibility really means.
Life insurance for newlyweds should be on your agenda because it gives you peace of mind knowing you will be able to take care of your new spouse if something happens to you.
Most newlyweds are enthusiastically looking forward to a happy and healthy life together and this can easily obscure the unfortunate reality that bad things happen to people every day. Being prepared is a selfless act that makes it possible to support a surviving spouse as well as any children so they can continue without a financial burden.
71% of newlyweds say it’s important to address life insurance before marriage yet more than half wait until they’re actually married, according to the National Association of Insurance Commissioners.
As a recently married couple, here’s what you should know about choosing a life insurance policy.
Types of Life Insurance for Newlyweds
Married couples who want to keep their premiums low but still provide for each other if something happens can choose a joint life insurance policy, which covers two people under a single policy.
Joint policies tend to be more affordable than individual policies and they offer a death benefit for both spouses with a single premium to pay. The policy owners can name each other as beneficiaries and add children to the policy as well.
The best life insurance policy for newlyweds takes into consideration the couple’s unique needs and situation. Still, it can help to understand your basic options first.
There are four main types of life insurance. All provide a death benefit if something happens to you or your spouse but they differ in terms of cost, cash value, and length of coverage.
Term Life Insurance
Term life insurance is the most affordable type because the coverage does not last a lifetime. Instead, your insurance will last for a term of 10-30 years. This type of policy has no cash value accumulation. That means you will need to pay your premium every month but you will get nothing back if the policy eventually expires.
You will have guaranteed death benefits for as long as the policy is in effect. The premium you pay will likely be fixed for a certain period of time and then it may get higher.
Whole Life Insurance
Whole life insurance is more expensive than term insurance because it lasts a lifetime. Whole policy premiums are fixed for the rest of your life, as long as you make your payments, and the policy has guaranteed cash value. This means your policy will actually build value that you can borrow against.
Guaranteed Universal Life Insurance
A guaranteed universal life (GUL) policy offers a guaranteed death benefit with a term that can last a lifetime. This type of policy also builds a cash value but it’s different from whole and term insurance because you can vary the timing and amount of premiums.
This type of policy is more flexible than whole life insurance because you can change your coverage and premiums but it also comes with risks. You need to be careful when you change your premium payments or take any distributions from the cash value to make sure your policy stays in effect.
Index Universal Life Insurance
An index universal life (IUL) policy has the premium flexibility of a universal life policy as well as the ability to adjust your death benefit. It’s also possible for this type of policy to grow the cash value faster with less risk.
The most important thing to understand about IUL insurance is your policy’s value growth is linked to a market index like the Dow Jones or S&P 500 Index.
What’s the best type of life insurance for newlyweds?
Most young couples just starting a life together choose term life insurance. That’s because it’s the most affordable insurance option and it lets you get coverage for a specific period of time like 10 or 20 years, which is likely when you will need coverage the most.
During your first few decades together, you can use your savings to invest your money and grow your life together until you’re ready to potentially consider a long-term policy like a universal life insurance policy.
If you already have children or you have a mortgage, make sure you take these factors into consideration when you choose the policy length and coverage amount. It may be a good idea to make sure your policy will last as long as the mortgage to protect your spouse or help your children go to college.
How Much Will It Cost?
Newly married couples may be surprised to find out how affordable life insurance can be. While not everyone getting married is young, often times newlywed couples will be able to take advantage of lower rates based on age and good health.
Sample life insurance rates pulled from our quote engine
A 25-year-old non-smoking male in excellent health can receive $500,000 in coverage for
- $14 per month on a 10-year term with MetLife
- $20 per month on a 20-year term with SBLI
- $27 per month on a 20-year term with Assurity
A 25-year-old non-smoking male in excellent health can receive $1,000,000 in coverage for
- $22 per month on a 10-year term with Protective
- $36 per month on a 20-year term with SBLI
- $48 per month on a 30-year term with Assurity
A 25-year-old non-smoking female in excellent health can receive $500,000 in coverage for
- $13 per month on a 10-year term with Assurity
- $16 per month on a 20-year term with Assurity
- $20 per month on a 30-year term with Assurity
A 25-year-old non-smoking female in excellent health can receive $1,000,000 in coverage for
- $19 per month on a 10-year term with Assurity
- $25 per month on a 20-year term with Assurity
- $34 per month on a 30-year term with Assurity
Rates are subject to change based on age and health factors. As you can see Assurity is currently very competitive for young females in good health. With males, the right company in this demographic varies.
Use our quote engine to compare your rates and contact us with any questions to ensure you are getting the absolute best price.
How much coverage do newlyweds need?
As you consider how much coverage to buy, it helps to consider your marital assets and debts. As newlyweds, you may have a mortgage or debts between the two of you, such as credit card debt, student loans, or car loans. You may want to get enough coverage for your spouse to pay off debts if something happens to you.
Don’t forget to consider final expenses, money for any children you have, and a nest egg for your family.
Here are some important considerations when choosing a coverage amount:
- Do you have any debts? Consider home loans, student loans, car loans, credit cards, and medical bills between you and your spouse.
- Have you considered final expenses? This is one of the greatest benefits of life insurance for newlyweds as it helps your spouse pay for funeral expenses, taxes, and unpaid medical bills.
- Do you want to provide for your children? Life insurance benefits can be used to pay for your children’s education.
- Do you want to provide a nest egg for your spouse? Life insurance can cover basic expenses and help your spouse maintain his or her current standard of living if something happens to you.
A general rule of thumb for the insured is 7-10 times your annual salary but this is only a starting point, and NOT a great method to be honest. You’ll want to review the above factors to tailor your coverage adequately to your needs.
While life insurance is likely the last thing you’re thinking about after getting married, there’s no better way to save you love someone than to make sure they’re protected and looked after if something happens to you.
Always remember that premiums can vary widely between companies.
That’s why it’s SO important that you understand how the different carriers might view your personal situation. Shopping around will result in you getting the best life insurance coverage for your needs at an affordable premium.
Please keep in mind that underwriting guidelines can and DO vary greatly between carriers and this is often a complicated maze for consumers to navigate.
The secret to getting the lowest rate is placing you in a policy with the company who views you in the most favorable light.
The truth is while the quote engine is a great place to start, if you are applying for life insurance as a newlywed, it’s important that you work with a broker who understands the complicated guidelines and will fight on your behalf to get the lowest rate for your situation.
We are one of the rare independent brokers that only sells life insurance so we happen to know a thing or two about it.
If you are ready to get started, please fill out a quote request or always feel free to contact us with any questions.
We are here to help and will never pressure you in any way.