By Team Tomorrow
Published August 9, 2021
Walking down the aisle is such a beautiful commitment — one that’s lived out over the course of your marriage.
As you and your spouse enjoy the honeymoon period, you may want to consider financial tools that can help you take care of each other not only in the here and now, but also through the hereafter.
Life insurance is one of those tools, and there are several reasons it can be appropriate for newlywed couples.
Even during the pandemic with unemployment rates at historic highs, nearly 60% of families were dual-income households in 2020. That means that the majority of families are budgeting, spending and planning for the future based on two incomes.
If one of you should pass away, it won’t only be difficult for the surviving spouse to continue to pursue those dreams you built together. Without your income, it may even be difficult for them to manage their finances in the immediate moment.
By purchasing a life insurance policy, you’ll be paying a small, monthly premium to ensure that if the unthinkable happens, your new spouse won’t have to deal with as much financial turmoil, or perhaps any financial turmoil at all.
If your spouse passes away, your responsibility to pay off their outstanding debt is nuanced. Federal student loans are almost always discharged or cancelled in the event of death. You also generally won’t be held responsible for any debt in their name only, depending on your state’s laws.
However, if your spouse did not have a trust established, creditors may be able to bill your spouse’s estate during the probate process, reducing the amount of money you receive as the surviving spouse.
But many couples have joint debt. Debt in both spouse’s names. The surviving spouse generally will be responsible for paying off these debts, which can be a problem when income is suddenly stunted.
A life insurance policy can provide your spouse with the money to pay off these joint debts, and any other debts they may be responsible for according to your state laws. It may even allow them to pay off the debt all at once, allowing them to downsize, move or do whatever they need to do to stabilize their financial life in your absence.
As a newlywed, the conversations sparked by taking out a life insurance policy can be a boon to your marriage. Term policies typically last from 10 to 30 years. That’s decades’-worth of future finances and life goals to discuss:
There are more than a handful of millennial couples that got married to access their spouse’s health insurance plan. That’s not to say they wouldn’t have gotten married eventually anyways — but more than a few wedding dates have been set to line up with health care expenses.
If your spouse relies on your health insurance plan, there’s going to be a financial problem if you pass away. Either the insurance offered through their work is inferior, or they don’t have an employer that offers health insurance and will need to pay for an ACA plan.
Either way, their healthcare costs are likely to go up. A life insurance policy can provide a financial buffer to account for these increased expenses.
Some couples wait to get life insurance until they have their first children. While this is certainly an option, you’ll want to consider that life insurance premiums tend to creep up as you age. For this reason, it’s almost always more affordable to open a life insurance policy today than it will be five years from now.
If you are planning on having children together at an undetermined date in the future, you may want to purchase a longer policy to ensure your coverage lasts at least as long as they’re living in your home.
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