Believe it or not, insurance plays an extremely large role in marriage. As a married couple, you transition from having independent financial responsibilities and assets to having joint responsibilities and assets. As you set off on your postnuptial journey, consider how the following insurance plans can help enhance your joint financial life.
- Life insurance: Once you cease being an individual and become a partner in a marriage, you begin to create joints financial obligations and joint financial goals. In order for those obligations and goals to be met, your household income likely needs to stay the same or possibly increase over the years and your expenses need to remain below a certain threshold. When a wage-earning spouse dies, the household income plummets – but financial obligations don't. By investing in a life insurance policy, you can ensure that your surviving spouse is able to continue meeting financial obligations you've created and has a better chance of achieving the financial goals you had.
Don't think this lets non wage-earning spouses off the hook, however. Because when a non wage-earning spouse passes away, household expenses can increase exponentially as the working spouse must pay someone to do much of the work that the stay-at-home spouse did. In addition, the emotional stress experienced by the wage-earning spouse can set his or her career on a temporary downward trajectory and interfere with his or her ability to earn. A life insurance policy can help stem the potential financial fallout.
- Disability insurance: Death isn't the only event that can affect your household income. The disability of a wage-earning spouse can be even more costly since the disabled spouse will also need increased medical care and supervision. A disability insurance policy allows you to determine the types of disabilities that will be eligible for benefits, the amount of income that can be replaced and the amount of time between the disabling event and payments. Disability insurance policies can be much less restrictive than Social Security; they can also pay more and have a shorter waiting periods, meaning that you don't need to rely as much on savings during that window of time.
- Long-term care insurance: Both stay-at-home spouses and working spouses should have long-term care insurance coverage. Long-term care insurance helps provide for the at-home or nursing home care of a spouse who can't complete certain activities of daily living (ADLs). With long-term care insurance, newlyweds can rest assured that they don't have to break into their savings or retirement funds to pay for the care of their spouse.
These are just some of the insurance considerations newlyweds should be concerned about. They must also consider the affordability of their deductibles, the beneficiary designations on their existing policies, how their insurance can affect estate taxes, and whether their limits reflect their total joint asset value for policies such as home and renters insurance. For a complete overview of the Oklahoma City insurance we offer to newlyweds, give us a call at ECI Agency today.