Why Should Newlyweds Consider Life Insurance?
Marriage is a time of commitment where two people promise to be together for better or worse until death. It is also a time of preparation as they begin to build a family of their own.
This preparation does not only include conditioning your own emotional and mental state that from now on you will be living with another person and sharing everything with him or her, but also the financial preparation which is one of the most important foundations when starting and raising a family. For one, you cannot live on love alone, especially when it’s time to pay your bills and send the kids to school.
At this time, you and your spouse will surely not just be thinking about buying a house or a car but saving up for the future as well. Aside from savings, you might also consider investing in some profit-making ventures to build up the family coffer.
As much as saving and investing brings in the profits, there is some amount of uncertainty to them too, considering the volatility of the economy and the market; therefore, you need some sort of back-up to even out the risk. This back-up comes from the form of life insurance for newlyweds or couples.
Common Characteristics of Life Insurance for Couples
Life insurance policies designed for couples are no different than the regular life insurance in its basic make-up, but certain features and inclusions have been added to benefit the couple should one of them die or become disabled.
If you are shopping for life insurance for newlyweds, you should be aware of the differences between the definition and nature of the exclusions and inclusions within a policy. An example of this is the difference between a joint and separate policy.
Understanding that a joint policy is more convenient because it requires less paperwork upon application but only pays the first death and leaves the other spouse uninsured makes you re-think which road to take - convenience or coverage? Thus, you are also given the chance to look at the other type, which is a separate insurance policy for both of you, which gives more coverage. Another life insurance feature worth looking into is the family income benefit. Where a regular life insurance policy only insures the breadwinner or main income generator of the family, the family income benefit pays the surviving beneficiaries an income instead of a lump sum benefit should either you or your partner die before reaching the provisioned pensionable age.
Other features which you can add or which can be purchased separately from your life insurance policy are the income protection insurance and the total permanent disability insurance. These insurance solutions can be a great help should you become disabled temporarily or permanently.
Income protection insurance works like the family income benefit as it pays a benefit in the form of a steady income stream rather than a lump sum. However, income protection pays you when you become disabled, whereas family income benefit pays your loved ones when you die.
The maximum income stream you can get from an income protection pay-out is up to 75% of your gross monthly income - paid to you until you are declared fit to go back to work again.On the other hand, total permanent disability insurance pays a lump sum benefit as opposed to the monthly pay-out from income insurance. This lump sum is paid in the event of a permanent disability claim caused by an illness or injury.
When Looking for Your Ideal Life Insurance
Finding an ideal life insurance policy can be elusive if 'ideal' was just based on its definition as being perfect. However, if the definition will be based on how something fits or complements your needs, then the search for your ideal life insurance policy does not have to be complicated. The search becomes much easier when you put some factors into consideration.
- Acknowledge and identify your needs. Finding a solution for a certain problem begins with the acknowledgement of the problem says the cliche. Do you and your spouse need life insurance? If your answer is no then consider the following questions:
- Is your savings sufficient to shoulder all expected and unexpected finances should disability, illness, or death occur in the family?
- Is there a possibility of selling your house because you will be unable to pay the mortgage should you suddenly become disabled?
- Can you envision putting your child’s education in jeopardy and the whole family relying on welfare?
Despite being a developed country, underinsurance is a problem that persists in Australia. Fact is, according to statistics, 60% of couples with children in Australia are underinsured. Add to that another statistics that shows 1 out of 3 people is likely to become disabled for more than 3 months before they reach 65.
- Look at what you can afford. Money is important and the price of the goods you buy makes a big impact on the family budget. If it is your first-time to purchase an insurance policy, the process can be quite tricky. As much as affordability is important, you should also consider the extent of its cover. Will you opt for a cheap policy with less cover or go for an expensive one but contains features that are not really necessary for your needs? Your goal is to find a policy in-between; therefore identifying your needs together as a couple or as a family before shopping for a life insurance policy is a crucial step to finding your ideal life insurance cover.
- Examine what the policy can do for you. Cover is very important which brings you to the type of policy you want to purchase. Will you need a life insurance cover until you retire or for a certain period of time only, say 10 or 20 years? Is the benefit indexed with the inflation? Is there a hidden catch to it? In order to see these things, you can educate yourself by dong a little research, ask the help of an insurance expert, and finally, read the Product Disclosure Statement of your policy where all the details can be found. This might be a tad boring for you but it prevents future trouble caused by misinformation.
Why be one of sixty percent couple that is at risk with being underinsured when you have the choice to a secure future for you and your family? Discuss together as a couple what your needs and risks are and the role of insurance to lessen these risks. You will feel fortunate in the future for having the foresight of getting a life insurance cover now.