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After saying “I do,” it’s not very pleasant to think about “until death do us part.” But the reality is that every newlywed couple’s financial planning should include a discussion about life insurance. Ensuring the financial stability of your spouse after your passing is the only way you can look after him or her once you’re no longer here. When making a decision about life insurance, there are several factors you must consider.

Outstanding Debts

Many young couples share outstanding debts that they make payments toward each month. These may include student loans, credit card debt, a car loan, a mortgage and any number of additional debts. If one spouse dies, would the other be able to continue making payments? The ideal life insurance would provide enough money to pay off such debts in their entirety, with money left over to continue supporting regular living expenses for an extended period of time. However, if such a policy is too expensive for a couple’s budget, one that provides enough money to continue making monthly payments has immense value as well.

Living Expenses

Whether both spouses earn an income or one is the primary wage earner, they both provide value to the marriage that would need to be compensated in the event that one spouse dies. A stay-at-home spouse will need the funds to continue meeting financial obligations and general living expenses, while a primary wage earning spouse will need the funds to pay for the housework that is left behind. Additionally, the grief that follows the loss of a spouse can set one’s career back or even interfere with the ability to earn a living.

Children

The average cost of raising a child from birth until age 18 is over $200,000, plus the cost of a college degree. If you and your spouse are planning to or already have children, these extra costs must be considered when selecting the amount of life insurance you wish to purchase. Ideally, a policy will be sufficient enough to cover your children’s expenses, with money left over for your spouse to continue meeting financial obligations for years to come.

Type of Life Insurance

The two main types of life insurance include term and permanent. Term life insurance pays benefits to your dependents if you pass away during a predetermined term—often 10, 20 or 30 years. Permanent life insurance coverage lasts your whole life, so long as you continue to make payments. Some permanent policies include living benefits, which allows you to deduct money from your policy to fund major life events such as a new home, a child’s education or an illness.

Grim as it may be, talking about life insurance early on in your marriage is the best way to prepare for an unforeseen tragedy.

Posted 11:01 AM  View Comments

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