Insurance Advice for Newlyweds
Starting a new life together
is exciting, but can also be a bit overwhelming. There's a world
of new responsibilities, including newly shared financial obligations.
Amidst all the celebrating and well wishes, developing a sound
financial plan that includes adequate protection against life's
unforeseen risks is extremely important.
Though not a topic most newlyweds
want to spend a lot of time thinking about, the chance of dying
prematurely and leaving behind a loved one is a risk that no married
person should ignore. So how do young couples know how much and
what kind of life insurance they need? The best way to determine
your individual insurance needs is to carefully review your financial
situation and objectives with an insurance advisor. But here are
some important questions to get you started:
If
you died tomorrow:
How much would it cost
your surviving spouse to meet monthly living expenses such as
the utilities, transportation and food?
How much would it cost
your surviving spouse to continue to maintain his/her standard
of living (buying new clothes, eating out, going to the movies,
taking an occasional vacation, etc.)?
Would your surviving spouse
be able to manage the mortgage or rent payments on one salary?
How much debt do you currently
have including credit card bills, student loans and car loans?
If you don't already own
a home, are you planning to purchase one soon?
Are you planning to have
children any time soon?
It's particularly important
to ask yourself these questions now because there are advantages
to purchasing life insurance early in life. If you buy when you're
young and healthy, you can "lock-in" coverage and insurability
options for additional coverage at favorable rates.
In calculating how much life
insurance you need, consider your other sources of income such
as savings, investments, Social Security benefits, group life
insurance and lump-sum pension benefits payable to a survivor.
Then figure how much additional money your spouse would need in
order to pay your final expenses and outstanding debt.
For a rough estimate of your
insurance needs, visit the Life and Health Insurance Foundation
for Education (LIFE) "Insurance Needs" calculator. Or,
for a free Consumer's Guide to Insurance, contact LIFE at 888-LIFE-777
or www.life-line.org.
For
more articles like this one, click here to visit our Newlywed
Life section.
