- Most married couples need life insurance to protect their spouse from financial hardship in case anything happens to them; having a policy can make the difference in how your spouse’s life could unfold if you pass away unexpectedly.
- There are essentially two different types of life insurance available to married couples – permanent life and term life. Which you should choose depends on your specific financial situation, but most financial experts recommend term life as the most affordable option for newlyweds and married couples in all stages of life!
- Everyday Life offers smart term life plans designed to save married couples time, money, and hassle by automatically adjusting their coverage based on important life changes like having kids, buying a house, and retiring. Customers who work with us are never overpaying for more insurance than they actually need, an approach which can save spouses 50% on their policies.
The (probable) necessity of life insurance for married couples & newlyweds – why you likely should have a policy
Most newlyweds would much rather shop for a home or new couch or unpurchased items off of their registry than for a life insurance policy, but getting life insurance coverage is an important part of building a solid financial foundation for the rest of your lives together! (Or at least, it probably is – and we’ll explain what we mean by this in a moment).
Life insurance is designed to replace the value of your income or caregiving support for your dependents if you pass away unexpectedly. Most of the time, people equate “dependents” with “children”, but a dependent is just really anyone who depends on you for financial provision. This often includes spouses who don’t have kids yet, even if both of you have jobs, because you both contribute to living expenses and joint debt payments.
For example, say that you and your spouse got married and have $12,000 worth of wedding debt together (the national average!). You combined your bank accounts shortly after you returned from your honeymoon; you just bought a house and now make about an $800 mortgage payment each month, not including all of the various other costs like utilities and lawn care that go into owning a home. Of course, you have many other monthly expenses together, and you share a car (because you work from home and don’t really need your own vehicle) that you’re about halfway through to paying off. Although your spouse has a general idea about your joint finances and sits down with you once a month to make a budget, you are the one that mostly handles the bills.
As a newlywed, this is probably the last thing that you want to think about, but if something happened to you, imagine the incredibly difficult situation that your spouse would be left in. They’d have a massive mortgage debt that they now have to figure out how to pay on their own, as well as any other credit card debt you’ve accumulated jointly, the car debt, and the wedding debt. They would need to pay for the cost of your funeral and burial. And they would no longer have your income to help out! They would have to navigate this hard road on top of carrying the burden of grieving you (and the burden is only more intense if you have children together).
The purpose of life insurance for married couples is to make sure that that scenario never happens. You pay a low premium every month to a life insurance company in exchange for a predetermined amount of coverage – say, $500,000. If you pass away while you are still paying premiums for your policy, then your life insurance company will pay out that $500,000 amount to your beneficiary (who you can name as your spouse), and they can use it for whatever they need – paying off debt, covering your funeral, etc. They’ll be protected financially from the tangible cost of not having your income anymore, and they’ll be able to move forward and have the kind of life that you would have wanted them to have.
Now, if you don’t have joint debt, or own a home, and you don’t have kids, and your spouse makes a sizable income, then you may not need a life insurance policy, but it’s important to think through the ways that your spouse depends on you financially before making the decision not to get one because the cost of life insurance for married couples increases as you age! If you don’t have children now, but may have them in the future, buying now can help you save.
Everyday Life’s online Needs Assessment Tool can give married couples an objective answer as to whether or not they need life insurance (it will tell you if not!) and how much they may need! It only takes a few minutes to use and you don’t have to submit any contact information. Try it out here.
Term life vs. permanent life insurance for married couples
There are two basic categories of life insurance available to newlyweds or married couples: term life insurance and permanent life insurance.
Term life insurance is the simplest form of coverage. Term life plans last for a designated period of time, usually 10 to 30 years, although Everyday Life Insurance offers plans up to 40 years. If you pass away during that time, your spouse or other dependents will receive the death benefit. That’s it. It’s a purely insurance product, which means its only function is to replace the value of your income or caregiving support to your spouse or other dependents if you pass away unexpectedly. You pay the monthly premiums in exchange for that promised amount of coverage. If you don’t pass away, and your plan’s term ends, nothing happens – you must either purchase new coverage or go without.
Permanent life insurance lasts your entire life. As long as you pay your premiums on time, whenever you die – at age 40 or 85 or at any other time – then your death benefit will be received by your beneficiaries. Permanent life insurance (also known as whole life insurance) also has a “cash value” component, which is an investment your life insurance company makes on your behalf that you can draw from in certain circumstances.
At first, permanent life insurance may sound like the better option, but it is much more expensive than term life insurance for married couples – between 5 and 15 times more expensive, to be exact. They’re pricier because the insurance company is guaranteed to cover you if you die; they take on more of a risk than if they sold you a term life insurance plan, which may not be paid out. They’re also pricier because of that cash value component. A portion of your premium is used to invest and grow that cash value, but the cash value may not be available to you at all for years, and if you don’t use it, your beneficiaries do not receive that amount when you die.
When you’re first starting your lives together, every penny counts – term life insurance for married couples is the most affordable option. But just being able to afford a permanent life policy doesn’t mean that you should get one! Something that many financial experts recommend is to keep your insurance and investments separate, because they serve different purposes. Life insurance isn’t a wealth building tool, so you probably shouldn’t waste money paying for the investment component of permanent life unless you have special circumstances.
Another reason why term life insurance may be a better option for married couples or newlyweds is because it makes more logical, long-term sense. Ideally, you won’t need life insurance forever. That situation mentioned above described newlyweds, who definitely needed life insurance, but as you get older, the ideal situation would be that you’ve paid off most of your debts (including your mortgage), built up your savings, and raised your kids to be financially self-sufficient when they come over age and move out. At some point, your death would not hurt your spouse as much financially as it would have if it had occurred when you first got married – or at least, that’s the goal and reality for most older married couples. You shouldn’t be paying for life insurance forever, so buying term helps you only spend the money to insure your life during the years that it makes sense to do so.
How Everyday Life’s smart term life insurance plans help married couples only pay for what they need
Most term life insurance is dumb.
That’s right – it’s necessary, as we explained at the beginning of this article, and it makes more sense than permanent life, but it still doesn’t make sense the way that most companies offer it. Typically, married couples will get one rate for one rigid block of coverage that never changes. That means that no matter what their actual coverage needs are, they’ll pay the same amount every month until the policy expires. But as we discussed above, people don’t need as much life insurance down the road, so this means that married couples with traditional term life plans will end up overpaying at some point in their life.
Traditional term life plans are also dumb because of the rigid underwriting process that rejects half of the people who apply and the fact that the contact with the agent ends after the sale.
We fixed that with our unique, smart term life plans. Everyone’s life is different, so we assess married couples’ needs to give them a personalized recommendation for coverage that automatically adjusts over time, resulting in lower premiums. They’re not only “smart” as in they make sense, but “smart” as in “smart technology” – these plans use predictive intelligence to calibrate your life’s changes and set your coverage and premiums accordingly. Our intelligence also makes it easier to find a product that you are likely to get approved for at the quoted price before underwriting, and we maintain an ongoing relationship with you to make sure you’re never overpaying for coverage you don’t really need. The way we do term life can save you and your spouse thousands of dollars on a policy!
If you want to be smart with your money, our term life insurance for married couples is what type of life insurance you should look into! Take our Needs Assessment today to get your personalized recommendation and compare your options.