If you’re headed down the aisle for a second (or third) time, you’re in good company. Nearly 40 percent of new marriages include at least one partner that has been married before, and half of those people have both been previously married.
While you’re busy checking off items on your pre-wedding to-do list like buying flowers and securing a venue for your wedding, you should also add updating (or securing new) life insurance to that list. Life insurance offers protection to remarrying adults should against one spouse passing away unexpectedly, to help fill in gaps in retirement savings, help with funds for college, provide money for funeral expenses and so much more.
What makes second (or third) marriages unique
Second (or third) marriages come with their own unique set of circumstances. Getting adjusted to your new spouse is never easy, let alone when you’re remarrying later in life. Financially speaking, remarrying means you have to get acclimated to new financial responsibilities and obligations. There might also be a new family you’re stepping into with kids or other circumstances such as a large age gap, and unchecked financial to-do’s that complicated your new marriage.
Nearly 20 percent of men who are remarrying have a spouse that is at least ten years younger, while 18 percent married a spouse who is six to eight years younger. In this case, it’s true that your partner might still have a long way to go to save for retirement and bills to pay if something were to happen to you. For remarried women, the likelihood of having a much younger spouse is far smaller than among remarried men. Just 5 percent of remarried women have a husband 10 or more years younger and 6 percent of remarried wives have a husband 6-9 years their junior.
There are lots of reasons to have life insurance. Life insurance can provide a much-needed safety net to protect both partners once you get married. Should one of you pass away, the proceeds of a life insurance policy can help with day-to-day expenses now or long-term financial goals for the future. All of these financial complexities make the case to review the life insurance you have or consider a new policy once you’re remarried at the top of the to-do list.
How to get prepared
One of the first steps you should take when you get married is to compile a list of your individual and joint assets and debts. That list should also include any life insurance policies you have with their current death benefit amounts and retirement and investment accounts. Creating a streamlined list is a great starting place to figure out your life insurance needs going forward.
Term insurance is one of the simplest and most affordable types of life insurance coverage and comes with options for different term lengths. Getting remarried is an excellent time to check-in on your current life insurance coverage and fill in any gaps you might have with a new life insurance policy. There are a few things you should think about when considering life insurance:
- What amount of money do you need each month to cover the cost of your household expenses?
- What amount of income would be lost if you or your new spouse were to pass away?
- Do you owe money on a mortgage?
- Is your retirement account balance lower than you would like at your current age?
- Do you have kids individually or together?
- How much have you saved for a college fund for your kids?
Answering these questions will help you figure out how much life insurance you need to protect your loved ones in the event of your death, and help you evaluate the existing life insurance you have.
Check your beneficiaries
Whether it’s life insurance, retirement accounts or investment accounts, naming a beneficiary is a crucial step to take. A beneficiary is merely the person, or people, who you wish to receive the death benefits if something should happen to you. Setting a beneficiary is important especially with life insurance since the death benefit proceeds will usually pass to the beneficiary tax-free.
It’s a good reminder to check your beneficiary designations if you get divorced or remarried since life insurance is a legal contract and can not be overruled by intentions outlined in your will, for example. It’s quite common in a second or third marriage that the beneficiary you named when you took out your life insurance policy is still the current beneficiary.
Your divorce decree may stipulate that you need to keep your prior beneficiaries in place, so make sure and double-check that before you make a change. Otherwise, be sure to update your life insurance beneficiary to reflect your new spouse.
Protecting beneficiaries is the main reason you have life insurance. So during major life events, like a new marriage, you should check about updating them. Changing a beneficiary on a life insurance policy is a simple task. Most insurance companies have you complete a form naming the new beneficiaries for the change to take place. You can contact customer service or in some instances, may be able to download a beneficiary change form online. With a Haven Term policy, you can change the name of your beneficiaries online, naming up to 10 primary beneficiaries and 10 contingent beneficiaries. The process usually takes less than five minutes. If you have any questions, Haven Life’s customer success team will help you with any questions you may have.
Getting remarried is a time to celebrate! While there can be many financial complexities to getting remarried, taking some time to review your finances before you get married can go a long way in setting up a healthy marriage. Sure, life insurance can feel like a tricky topic to discuss, but a meaningful conversation to protect each of you for the future should something unexpected happen.
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Shannah Compton Game is a CERTIFIED FINANCIAL PLANNER® professional with an MBA and is the host of the award-winning podcast, Millennial Money, where she shares totally relatable and easy to understand financial advice that will actually make you want to talk about money.
Haven Life doesn’t provide tax, legal or investment advice. This discussion is intended as general education only. We encourage you to work with your own personal tax or legal professionals and your financial advisor. Opinions expressed by the author are their own and do not necessarily represent the views of Haven Life.