From the time they are little, many people dream of being married someday. Who will the person be? How will they meet? How many beautiful children will they have?
Typically, nowhere in those fantasies do the topics of shared financial responsibilities and preparation for the unexpected come into the equation.
But as we know, planning for a lifetime with your soulmate extends beyond just wedding arrangements and booking the honeymoon.
There are impactful money decisions newlyweds need to consider (#adulting) once they’ve gone from “me” to “we.” And that includes figuring out if something like life insurance is right for you and perhaps, sometime shortly, your growing family.
Why life insurance?
Life insurance for newlyweds can be a critical financial component of any lifetime partnership or union. When you marry, you promise to take care of each other for richer or for poorer. In sickness and health. And, yes, until death do you part. Life insurance extends that promise further by helping to care for your partner even after you’re gone financially.
Money from a life insurance policy can be used by your partner to help pay day-to-day expenses, pay debts and, eventually, help support your children. A good place to start when determining if life insurance is for you is by just getting an idea of the coverage amount you need to protect your loved ones financially.
Life insurance needs aren't one-size-fits-all.Calculate your needs
Choosing term or permanent life insurance
There are many different types of life insurance, but the two main varieties are permanent and term. Permanent life insurance coverage lasts a lifetime and accrues cash value that builds over time and can be borrowed against. However, loans from the policy reduce the cash value and the death benefit. As it tends to be more complicated than term life insurance, permanent life insurance often requires the assistance of a financial professional or agent. Additionally, the premiums are significantly higher. A $500,000 policy for a healthy 35-year-old man would likely cost around $550 per month.
Term life insurance is an affordable and practical way to protect your loved ones’ financial future. A 30-year, $500,000 policy would cost that same, healthy 35-year-old man about $38 per month. The way term life insurance works (once you’ve applied and gotten approval for coverage) is in exchange for a monthly premium, an insurer will pay a death benefit if you were to die within the term length.
What does term life insurance cover?
Purchasing life insurance does occasionally require conversations with your partner that can be slightly uncomfortable. But when compared to planning a wedding, it’s practically a cake walk.
Together, you’ll want to figure out how much coverage you both need to financially protect each other if one of you were no longer around. When it comes to term life insurance, many experts suggest buying coverage that’s 5 – 10 times your annual salary. If you’re earning $50,000 per year, that would mean purchasing $250,000 – $500,000 in term coverage at the very least.
That’s a good rule of thumb. But it might not be enough if you think about all the expenses a new married couple will face over the many years next together that lie ahead.
When purchasing life insurance, consider the following expenses:
For young newlyweds:
- How much of your income that your partner relies on to stay financially afloat
- Costs of daily living like rent, utilities, insurance, taxes and more
- Financial obligations like a mortgage, car payments, personal loans, and other debt repayments
For young newlyweds with children:
- Education and extracurricular-related expenses
- College tuition
- Insurances for kids like health and dental
Fortunately, it’s simple to figure out how much life insurance is needed to protect your new spouse. An online life insurance calculator takes into consideration your income, debts, living expenses and financial dependents to recommend a range of coverage amounts that are appropriate for your situation. No air math required.
Saving on your plan for the future
Age and health determine what your life insurance rate will be. Therefore, newlyweds who purchase policies early on can usually lock in an affordable premium for a few decades. Plus, take it from someone who was once a newlywed, life only gets busier from here. So being proactive and checking life insurance of your to-do list can have multiple benefits.
To give you an idea of the price: Imagine you’re a newly married 28-year-old man in excellent health. If you want to purchase a 30-year, $500,000 Haven Term life insurance policy, it could cost around $33 per month.
That price increases to about $38 per month once you’re 35, and that’s also assuming you’re still in excellent health. While it’s not an astronomical difference, the reality is that health is not something you can ever take for granted. I was a newlywed at 28, and by the time I was 33, developed a condition that would have prevented me from qualifying for coverage. Acting swiftly helps ensure that your partner and young children are protected from the start.
It’s worth noting that the policy you purchase now is not the amount of coverage you are stuck with for life. As you get older, your income likely increases as does the number of financial dependents (code word for “kids”) you have. It’s important to revisit your life insurance needs every few years, and if you find you’re underinsured, purchase another small policy to increase your coverage.
What to look for when shopping for term life insurance
If you’ve been put off by the traditional, cumbersome application process that is often synonymous with life insurance, you might want to reconsider now that is is possible to apply for, purchase and get coverage started entirely online. If this is an approach that appeals to you, here is what you’ll want to do next:
Determine your coverage needs
We mentioned already that most experts recommend a coverage amount that’s 5-10 your annual salary. That’s a good place to start.
However, you should also take into account any debts you have that would be left to your partner and future family to cover. Daily expenses, a mortgage, co-signed loans and the future expenses of children are all worth thinking about when you’re going through the life insurance buying process.
Again, an online life insurance calculator can be your BFF here. It’ll help to provide a comprehensive look at your financial situation along with a tiered recommendation of how much coverage you need. Having options is good.
Get estimates for coverage
Once you’ve decided how much life insurance coverage you need, it’s time to shop around and compare quotes. Make sure to compare term life insurance quotes for at least 3 to 4 companies, taking special care to make an apples-to-apples comparison. If you decided on a 20-year, $500,000 policy, for example, get multiple quotes for that exact amount of coverage over a 20-year timeline.
On our quote page, you can get a free quote for the Haven Term policy and also compare its pricing to top insurers to get a solid – and very efficient – understanding how much this coverage costs across providers.
Check life insurance company ratings
Life insurance companies receive ratings from established, independent rating agencies based on their financial strength and the rating agency’s opinion of a company’s claims-paying ability. Each agency has a rating scale – kind of like a report card. Remember those?
A.M. Best provides such rating. Companies like A.M. Best do an independent assessment of a company’s financial strength and ability to meet its financial obligations. The Haven Term life insurance policy is issued by MassMutual, which is rated A++ by A.M. Best, their highest possible rating.* That’s as good as it gets.
When buying a policy, it’s a smart idea to compare the ratings of different insurers to help assess the financial strength of their issuing companies.
Applying for a life insurance policy online
Application and approval process that used to take several weeks, phone calls and faxes, can now be accomplished from the comfort of your home, entirely online.
The life insurance applications can be long and thorough. That said, most of our customers can apply for the Haven Term life insurance policy in less than 15 minutes.
Here are a few of the things you’ll want to have on hand to make the process seamless:
- Financial information, like your salary and net worth
- Personal and family health information, including height, weight, and recent medical history
- Occupation and lifestyle information
- Social Security Number and active driver’s license
- Contact information for your primary care physician, if you have it
- Name of your beneficiaries along with their phone numbers, dates of birth and addresses (you can always change this at a later time)
When submitting an application for the Haven Term policy, issued by our parent company MassMutual, you can receive an immediate decision on eligibility. If approved, you can start coverage that day.
Preparing for the future
All newlyweds should consider life insurance to help financially protect their new life partner.
While nobody wants to imagine an unexpected death — especially so soon after one of the happiest moments in their life –, it’s important to prepare for the “what ifs” that life can throw your way.
Life insurance for young, healthy newlyweds is affordable and provides immeasurable peace of mind for both spouses. And just think, when buying life insurance from the get go, it’s one less thing you’ll need to do when preparing for what will likely be your next significant milestone: becoming a parent. Trust me. Spare time becomes a luxury then.
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*Rating is as of May 1, 2017, and is subject to change. MassMutual has also received high ratings from other rating agencies.