The Newlyweds’ Guide to Life Insurance
Top three considerations for choosing the right coverage
Paying off wedding-related debt is only the first of many financial obstacles facing this summer’s newest married couples. And while it may be difficult to think about the possibility that your spouse may one day be without you, planning for your death now by evaluating your life insurance needs is one way to show your new spouse just how much you care.
When you begin shopping for life insurance, asking yourself some practical questions can help you select the type and amount of coverage that best meets your needs. Three of the most important questions are:
- How much debt are you or your spouse bringing into the relationship? It often happens that one half of a married couple is a number-cruncher with a 10-year investment plan while the other is a free-spender with some hefty credit card debt. If your union has a similar dynamic, you may need to consider how much money your spouse will need to settle your shared debts when you die. If you and your spouse have any amount of debt, your ideal life insurance amount should provide enough money to pay it off and still provide money to meet living expenses for an extended period of time.
- Are there children in your future? Kids are a major part of many marriages and whether you’re planning to have children with your spouse or forming a new family with children you already have, their welfare is always a consideration for how much insurance you need. The average cost of raising a child from birth to age 18 is over $200,000, according to the US Department of Agriculture. Added on top of that is the cost of college – multiply that times however many children you have, and the amount of life insurance protection you need climbs significantly.
- How many years will you be paying your mortgage? If you’re a young couple just starting out, you may take a 30-year mortgage on your home. But if you died, would your spouse be able to make the monthly payments without your income? If the answer is no, you need to consider having enough money available to your spouse so he or she can meet monthly bills and remain in your home. Maybe even pay off your mortgage entirely. Even if you have been in your home for decades and are at the end of your mortgage, your spouse will need money to maintain the home, as well as funds for retirement.