Getting engaged changes your life and suddenly you live for two – maybe even soon-to-be more. The benchmark for purchasing life insurance is whether you have someone financially dependent on you, says Michael Barry, spokesperson for the Insurance Information Institute. That happens when you go from single to married, even if your spouse also works, Barry says.
He says both the future husband and wife should obtain a life insurance policy once they become engaged, whether they are in their 20s or 50s, to ease the other’s financial burden should one die.
If you’re among the lucky lovebirds getting engaged this year, experts say that should include purchasing life insurance.
Marvin H. Feldman, president and CEO of The LIFE Foundation, recommends starting the process of obtaining insurance about three to six months before the wedding date, noting that it takes time for the paperwork to be completed and processed. It could take longer if there are trust documents, new wills and medical issues that need to be addressed, he adds.
“If the wedding plans are firm, I recommend the quicker the better,” said Feldman.
He says the beneficiary of the policy should be listed by name as the intended spouse, suggesting that in the wife’s case, the married name can be added later.
Feldman says if one person dies before the wedding takes place, the intended spouse would be legally entitled to the proceeds of the policy.
When you’re young, in love and dreaming of a long life together, life insurance isn’t always on the radar screen, but insurers say it should be.
“Young people may feel no need for life insurance, but they need to look at their financial obligations. There could be college loans to pay off, or any bill that was signed on the dotted line. If you get married and one spouse has tremendous debt, life insurance would cover that debt in the event of a death,” said Feldman.
Barry points out that life insurance is usually less expensive for people in their 20s and 30s, provided they’re in good health and don’t smoke. Whole life insurance policies never increase in price. However, he says for most young couples without a lot of money, a more affordable option is term life insurance—which pays out only in the event of death within the term of the policy, whether it’s 10 or 30 years.
If this is a second marriage for either or both of you, or if you’re an older couple, you need to look at the total package before deciding how much insurance to purchase or whether a current policy is sufficient, Feldman says.
Will you be moving into one larger home? Are there new children with the new merger? Are there other new expenses? All these need to be considered.