Life Insurance for Newlyweds [2024]

The choice to enter into a marriage or civil union with another person may be the most influential of your life, and discussing financial plans is an essential conversation for a couple to have. Whether or not to purchase life insurance for newlyweds is an important topic to discuss when planning for your financial future together.

This guide describes when to buy life insurance after marriage and where you can find affordable insurance companies near you.

The Importance of Life Insurance for Newlyweds

Consider how your family’s money is handled and organized, especially when exploring life insurance for low-income families, before settling on a policy. For instance, do you have a principal breadwinner among your twosome? How would your partner and family support themselves if one of you were to pass away?

Purchasing life insurance for both partners is the most cost-effective option. Life insurance when you get married would also benefit you in several other situations.

Your Costs Continue to Rise

Both partners must have enough money to take care of all joint expenses if one dies, such as a mortgage or rent, car payments, and utility bills. Having life insurance on you and your spouse might protect your loved one from financial troubles in the event of your untimely death.

You Are in Financial Straits

You probably don’t want your spouse to be solely liable for the repayment of your mortgage, student loans, or your children’s education debt if you pass away. Your spouse may be able to avoid financial hardship in the event of your death by taking out a life insurance policy.

You Want to Save Money

Buying life insurance early can help save money long-term. Several factors associated with aging might increase your life insurance quotes. If you buy life insurance when you’re young, you can lock in more affordable rates. Compare life insurance rates by age and gender here.

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Married Couple Insurance Options

Once you’ve decided to purchase life insurance, you’ll need to choose the type of policy and amount of coverage most suited to your situation. Your budget and the time and type of financial commitments you have, including loans, should all factor into your decision.

Consider the different types of life insurance below as you shop for married couple life insurance.

For instance, newly married couples should have joint life insurance to establish a financial safety net that protects both partners in case of an unexpected loss, providing peace of mind and stability during the early stages of their life together. 

Joint life insurance can also offer more comprehensive coverage and potentially lower premiums compared to individual policies, making it a practical and efficient choice for couples starting their journey as a family. (For more information, read our “Why should couples have joint life insurance?“).

Read More: Life Insurance for Same-Sex Couples

Term Life Insurance for Married Couples

In many cases, buying term life insurance is the best option. It is one of the most cost-effective forms of life insurance, but coverage only lasts for a set term. The surviving spouse will get a predetermined sum if one of you should die within the term period.

You get to set the terms of your term life insurance policy, including the payout amount and policy duration. So if you want to term life insurance to replace your income for the next decade in the event of your death, you could choose a policy with a payout equal to your annual income over ten years.

Your policy’s duration can also be tailored to your specific budgetary requirements, but most term life policies last 20-30 years.

Whole Life Insurance for Married Couples

Whole or permanent life insurance, which lasts for the rest of a person’s life, can be used to pay for final expenses and to pass on a legacy. It’s an excellent option for those wishing to leave money to loved ones regardless of mortality since the cash value of permanent life insurance can grow over time.

You may also be able to use the cash value as collateral for a loan while you’re still living. Learn more and compare rates for cash-value life insurance for newlyweds.

Survivorship Life Insurance for Married Couples

Joint life insurance comes in the form of survivorship life insurance policies. Policies cover two people simultaneously and are less expensive than getting two individual plans.

There are two options for setting up this form of group insurance:

• First-to-die life insurance: The beneficiary receives the payout following the first death. After that time, the policy is no longer valid and will not cover the surviving spouse.
• Second-to-die life insurance: Useful for families who wish to leave their children or other heirs enough money to cover any potential estate or inheritance taxes or those who care for a disabled child or family member. 

Beneficiaries could use the money from either policy to replace lost income, pay off the mortgage, or settle outstanding bills. Remember that you may need help locating this life insurance due to the few providers offering it.

Get life insurance quotes from multiple companies before making a final decision. Most households only need basic term life insurance. The ideal option is to have your insurance plan because your personal and financial circumstances can change anytime.

How much life insurance do newlyweds need?

Life insurance is typically necessary for married couples. There are many reasons, such as securing one’s financial future and paying off debt. As a result, before settling on a policy, you should calculate how much protection you’ll require. Try the DIME method or future earnings multiplier:

• Future earnings multiplier: Multiply the money you want each year by the number of years you plan to work. Take a hypothetical family of two in which the breadwinner earns $75,000 per year and has a youngster who is eight. The parents may wish to continue paying for the child’s insurance policy until they turn 18. They concluded by multiplying $74,000 by ten years, which equals $750,000.
• DIME approach: You’ll need to get more specific when estimating your requirements for this strategy, so consider your Debt and final expenses, Income, Mortgage, and Education costs to determine the right policy amount for your family.

If you are the main caregiver, multiply the number of years you need to safeguard by the yearly cost of the primary caretaker’s activities, such as childcare, meal preparation, and house cleaning. The end goal is to get enough protection for one’s loved ones.

When determining your family life insurance needs, you must also factor in inflation. When you can buy term insurance at a low cost, it’s usually wiser to have more coverage to protect your family, even if costs climb.

Do we need married couple life insurance if we don’t have children?

Couples often buy life insurance to continue caring for their children even if they lose one or both incomes. But what if you don’t have or plan on having children?

Buying life insurance before having a kid is smart. First, life insurance rates are often less if you purchase the policy when you are younger. Thus, if you get a policy now, you can lock in today’s low rates for the foreseeable future.

In addition, you need to be healthy enough to purchase life insurance. If something happens to your health in the future that makes you uninsurable, you will have to pay more for coverage and have a limited number of policies to choose from.

Even if having children isn’t in the cards for you, you should still consider getting life insurance to protect your spouse until you and your partner have amassed enough assets to cover all of your financial needs. You might also need life insurance if other family members rely on your income or if you have charitable aspirations.

Can domestic partners receive life insurance?

Some domestic partners share the same concerns about financial stability as married couples. It is important to check the legislation in your state and the requirements of your life insurance company to see if domestic partnership life insurance is available.

If you and your domestic partner are not legally married during the underwriting process, you may need to show that you are a domestic partnership with proof of shared expenses and children.

Domestic partners may not be able to buy a joint life insurance policy in some states, but they may be able to buy separate plans from different insurance companies. In regards to married or partnership status, individual policies are not affected. Domestic partners can get an individual life insurance policy to help support the survivor of a domestic partner after they die.

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Bottom Line on Life Insurance for Newlyweds

Although life insurance may not be at the top of a newlywed couple’s honeymoon agenda, it is essential to a sound financial strategy and it is something that should be discussed early in marriage if you want to get the best rates.

Taking the time to plan for your future and the future of your loved ones will provide you with peace of mind and financial security as you begin your new chapter together. Make a well-informed decision regarding life insurance for newlyweds by researching the many policy options, the different factors that affect your rates, and the potential amount of coverage you may require.

Read more: Life Insurance for Parents 

Case Studies: Life Insurance for Newlyweds

Case Study 1: The Young Couple

A young couple recently married and is excitedly planning their future. They decide to purchase life insurance policies as a way to protect each other financially. They opt for term life insurance policies with coverage amounts that align with their current financial obligations and anticipated future needs, such as mortgage payments and potential child-rearing expenses.

Case Study 2: The Dual-Income Household

A newly married couple enjoys the benefits of a dual-income household. They recognize that the loss of one spouse’s income would significantly impact their financial stability. To ensure financial security, they invest in permanent life insurance policies that accumulate cash value over time. These policies can provide a source of funds in the event of unforeseen circumstances or supplement retirement savings.

Case Study 3: The Blended Family

They understand the importance of protecting their children’s well-being and consider life insurance as a means to provide financial support in the event of their untimely passing. They work with a financial advisor to create a comprehensive plan that includes life insurance coverage to benefit both their current and blended families.

Case Study 4: The Entrepreneurial Couple

A newlywed couple decides to start a business together. They are aware of the financial risks involved and recognize the need for a safety net to protect their business and personal assets. They opt for business-oriented life insurance policies, such as key person insurance or buy-sell agreements, which can provide funds to support the business and ensure a smooth transition in case of one partner’s unexpected demise.

 

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