Yea, yea, we know…insurance isn’t the sexiest or most exciting topic to think about when it comes to planning your future, but it is one of the most important. The future isn’t predictable, and sometimes life surprises us with unexpected obstacles. Choosing the right insurance policies to invest in as a married couple can help ensure that your life isn’t disrupted any more than it needs to be when challenges arise. It’s a part of building a stable future, and of protecting yourselves, one another, and your families as much as possible. What could be more romantic than that? Let’s have a look at five insurance policies that will make your married life easier.
1. Life Insurance
Getting married means merging your lives and likely your finances. The longer you are together, the more you will come to depend on one another for the roles you play in running your lives together. If one of you were to suffer an untimely death, that would obviously affect the lives of you and your family members to a huge degree. If you don’t have life insurance, that impact could go way beyond the emotional aspect and cause an insurmountable financial burden.
If you have life insurance, you can rest assured that if something awful happened to either of you, the rest of the family could grieve without having to worry about finances on top of everything else (Ramsey Solutions, 2021). A life insurance policy can cover everything from rent to funeral expenses to childcare, and it can also function as an inheritance to be given to loved ones (Huddleston, 2020).
To make sure you’re covered, both of you should take out 15 to 20-year policies which are worth 10 to 12 times what you make in a year. For example, if you make $35,000 per year and your partner makes $60,000 per year, you should take out a policy worth at least $350,000 and your partner should get a policy worth $600,000 (Ramsey Solutions, 2021).
If you already are or you’re planning on becoming a stay-at-home parent, you still need life insurance. To calculate how much the policy should be worth, add up all the extra costs that would come up in your absence. That could include things like childcare, laundry/cleaning services, meals purchased from outside that you would normally cook, and any other relevant expenses. Then, multiply that figure by 10 to 12 to calculate the worth of an appropriate life insurance policy (Ramsey Solutions, 2021).
Some employers offer supplemental life insurance as part of their compensation packages, but frequently the coverage is not enough. Moreover, you’ll lose coverage if you leave your job. So if you can, make sure to take out your own life insurance policy instead of relying on an employer (Huddleston, 2020). Life insurance is too important to take big risks on.
When your policy end date approaches, you shouldn’t have to renew if you have been saving wisely. In order to be on track to achieve this goal, a good rule of thumb is to put 15% of annual income towards retirement. After 10 to 15 years of saving and investing those savings wisely, you will have likely saved enough to be self-insured (Ramsey Solutions, 2021). (In fact, many young couples are also opting for more aggressive investing and saving in a bid to attain financial freedom through the FIRE movement in addition to being able to self-insure.)
However, not everyone is in a position to afford to be self-insured. When you buy your original 10 to 15-year policy, make sure you choose a policy that can be converted to a permanent policy (meaning it would be active for your whole life). That way, you have some wiggle room in case you don’t manage to or don’t want to save enough to be self-insured by the policy end date (Huddleston, 2020).
There are a lot of misconceptions around the cost of life insurance. Luckily, it’s a lot cheaper than you probably think. A policy for a 30-year-old worth $250,000, for example, totals about $13 per month–not exactly breaking the bank (Huddleston, 2020).
Life insurance is not something you should put off. Get this before you get married!
2. Health Insurance
One of the perks of getting married is that it opens up previously unavailable health insurance options. Yay! After marriage, you may be eligible to switch to your spouse’s health insurance plan, or vice versa. You won’t need to wait until the next open enrollment period opens, because marriage is one of the qualifying events that allows one to make changes to coverage outside of open enrollment. Switching to your spouse’s plan or vice versa might confer better or more affordable coverage (Huddleston, 2020).
Many people who are young, healthy, and unlikely to experience any major health problems that would require care prefer to save on health insurance by choosing a cheaper plan with a higher deductible. This should be done cautiously; it might be alright if your employer offers a good health savings account, or if you can afford to cover the cost of your deductible if necessary. If a plan like this will keep you from seeking care when you need it, it might be best to reconsider. You should never economize on your health! Plus, unexpected medical expenses can quickly add up, and figuring out how to pay for them could affect your marriage. Finances are one of the top reasons for divorce. Therefore, good health insurance also functions as a preventative measure against some financial issues that could put stress on your relationship.
3. Car Insurance
Guess what? Getting married makes you a better driver! Just kidding. Even so, you might be able to get a discount on car insurance by getting married! Statistics show that married drivers file fewer claims than unmarried drivers and are less risky for insurers. For this reason, insurance prices drop around 6% after marriage; this can equate to around $100 per year (Ramsey Solutions, 2021) which you could put towards the cost of something else–like a year’s worth of that fancy natural shampoo you love, or your fiance’s home DJ system.
Aside from savings, you might actually be obligated to let your car insurance company know you’ve gotten married. This is because other household members are often required to be on one another’s policies, even if they don’t regularly drive each other’s cars (Huddleston, 2020).
When you contact the company to tell them the good news, it’s also a good time to ask them about any other discounts that might have become available to you after getting married. For example, if both you and your future spouse bring cars into the marriage, you may have the option of insuring both cars under the same policy and saving money through a multi-car discount (Ramsey Solutions, 2021). Ain’t it great to be married?!
4. Homeowner’s or Renter’s Insurance
When you take steps such as moving in together and getting married, that means acquiring more belongings in one household (Huddleston, 2020). If you’re at all attached to your stuff or to the money it would take to replace it in the event of a fire, earthquake, tornado, hurricane, flood, or other disaster, you might want to consider investing in a good home insurance policy.
For high-value items like collectibles, fancy artwork, or wedding rings, you may need to add on a rider in order to have those covered. If you’re concerned about the cost of all these insurance policies, bear in mind that you may also be entitled to a discount if you use the same company for multiple insurance needs–such as if you use the same company for your car insurance and homeowner’s insurance, for example (Huddleston, 2020). You may also be able to lower the cost of your home insurance by adding safety features like smoke detectors or alarm systems (Huddleston, 2020).
Luckily, home insurance isn’t actually that expensive. Renter’s insurance only amounts to about $15 or $20 per month (Ramsey Solutions, 2020), and while homeowner’s insurance is more likely to be in the neighborhood of $115 per month (Deventer, 2022), it’s a mere drop in the bucket compared to the cost of replacing your home and all your valuables if disaster were to strike.
5. Disability Insurance
Unfortunately, over 25% of 20-year-olds today will likely become disabled by the age of 67. Disability sometimes also afflicts younger people, too. While it’s impossible to know what might happen in the future, it is possible to cover yourselves in case of a life-changing illness or accident that could leave you or your partner unable to work or function at full capacity, temporarily or permanently (Ramsey Solutions, 2020).
When you get married, you become more entwined and therefore more dependent on what each of you brings to the household. And that’s a good thing! Together you can support one another financially as well as emotionally and save money by taking advantage of economies of scale. However, a sudden disability could definitely send financial shockwaves through your household, and disability insurance gives you the peace of mind to not have to worry about that. Another plus is that disability insurance can be used to replace income if one of you needs to take maternity leave (Ramsey Solutions, 2020).
Getting disability insurance through a group plan offered by your insurer is likely the most affordable option, but it can also be risky because your coverage will end if you leave your job. To save money on an individual disability insurance policy, sign up when you’re young and healthy. Alternatively, you can take out a plan that only covers you for long-term disability (this is more affordable) and plan to use an emergency fund to cover you in the event of any short-term disability (Ramsey Solutions, 2020).
So…Which is the Most Important?
Of these five, which type of insurance do you think is the most crucial to invest in or plan for when you’re about to get married?
And the answer is…none of the above! It’s a trick question. Although all of the insurance tips listed above are important for married couples to consider, when it comes to your marriage the absolute most vital insurance policy is your prenup!
A prenup offers something priceless: peace of mind. It gives you peace of mind regarding a.) what will happen just in case your relationship doesn’t work out down the road, and b.) what the financial roles, expectations, and arrangements are within your marriage itself. As a bonus, it can also help you open up communication around the nitty-gritty of many financial matters you should work out prior to getting married.
If you feel daunted by the complicated and costly process of consulting with attorneys in order to draft your prenup, check out how our collaborative and affordable prenup software works. You and your partner will be digitally guided through the entire prenup process, from financial disclosure to options for what clauses to include to alerting you of any discrepancies between your desires. Negotiating any differences can be a lot easier from the comfort of your living room than while sitting in a sterile office building with attorneys present!
Once you’ve got your prenup and insurance policies covered, you can rest easy knowing that all of the what-ifs are taken care of and get back to planning your wedding. Congratulations; we wish you all the happiness in the world!
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Julia Rodgers is HelloPrenup’s CEO and Co-Founder. She is a Massachusetts family law attorney and true believer in the value of prenuptial agreements. HelloPrenup was created with the goal of automating the prenup process, making it more collaborative, time efficient and cost effective. Julia believes that a healthy marriage is one in which couples can openly communicate about finances and life goals. You can read more about us here Questions? Reach out to Julia directly at [email protected]
Deventer, C. 2022. Average Cost of Homeowner’s Insurance in March 2022. Retrieved from: https://www.bankrate.com/insurance/homeowners-insurance/homeowners-insurance-cost/#summary
Huddleston, C. 2020. Getting Married? Make an Insurance Plan! Retrieved from: https://www.forbes.com/advisor/life-insurance/getting-married-insurance-plan/
Ramsey Solutions. 2021. Insurance Tips for Married Couples. Retrieved from: https://www.ramseysolutions.com/insurance/insurance-tips-for-married-couples#life_insurance