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Getting married is a turning point in your life that drastically changes your goals and responsibilities. This may be when you find yourself scrambling around to open new bank accounts, looking for Home Loans, creating household budgets and collectively planning the future with your spouse. If you are in a similar phase, stop for a second and think about one crucial aspect you may have missed – buying Life Insurance.Although Life Insurance may not seem vital when you are relatively young and a newlywed, delaying the same might lead to complications that may come back to bite you later in life. Life Insurance is a critical aspect of future planning and should be sought immediately after getting married. Also read: Do you need Life Insurance if you are unemployed?
What are the types of Life Insurance plans?
Before jumping into why Life Insurance is important after marriage, you should know about the types of Life Insurance plans: Term plans, Whole Life plans, Unit-Linked Plans (ULIPs), etc. term plans offer financial compensation to the nominee in case of your untimely death. However, if you survive through the term period, you will not receive any maturity or survival benefit. Because of this, premiums under term plans are typically cheaper than those of Whole Life Insurance plans. Whole Life Insurance plans are ideal for married couples as they come with dual benefits – coverage and savings. One can use the savings component to fund short-term or long-term goals. Compared to Term Life Insurance, this policy has a higher premium rate.If you are a risk-taker, ulips can be an ideal bet to cover your short-term fund requirements. ULIPs are insurance-cum-investment products. So, you get a combination of insurance coverage and investment returns. You can choose the asset class you wish to invest in, such as stocks, bonds , etc. Also read: What you need to know about buying Life Insurance for your grandchildren
When to buy a Life Insurance policy?
You can buy Life Insurance at any point in your life, and there isn’t a right or wrong time to invest in it. All you need to ensure is that you are financially capable of making the premium payments whenever you must do so.Most people buy Life Insurance once they start earning, after marriage, or after they have children. The financial obligations increase once you're married, especially when your spouse depends on you. It is always recommended to buy a life cover when you're young as the premiums are usually low, and you and your spouse are less exposed to any illness/disease. Thus, early investment in a life insurance policy is always preferable. Also Read: What is Term Insurance?
Why do you require Life Insurance, especially after marriage?
There are various reasons it may be beneficial to have a suitable Life Insurance policy once you are married and have dependents.
Increase in expenses
With marriage, your responsibilities expand, and you can incur several additional expenses associated with growing your family, raising children, looking after your in-laws, and so on. In your efforts to keep up with these costs, you may ignore the fact that you require a backup plan. If life takes an unexpected turn and should you pass away, the policy coverage will play a vital role in helping your spouse and kids live a financially independent life.Even if you and your spouse are alive during the policy term, a Life Insurance plan will add more stability and security to your future planning.
Loan repayment and debt security
A Home Loan is a popular choice for newlyweds who wish to move to a separate residence right after their marriage. However, paying back a home loan could take decades, depending on its size and your financial income. During this time, buying a Life Insurance policy is advisable to ensure that your loan's financial burden does not fall upon your family in case of your untimely death.There are a couple of ways in which a Life Insurance policy helps you in case you have a sizeable unpaid loan:Some insurance companies offer specific Mortgage Redemption plans designed to repay loans after the policyholder passes away. If you pass away during the policy term, the insurance company pays the outstanding loan amount to your family or directly to the lender.You can also use your Life Insurance plan to repay a loan by assigning the policy to the lender as collateral. Doing so gives the lender the right to receive the policy benefits after your death. Also Read: All About ULIP - Unit Linked Insurance Plans
Passing on your inheritance and emergency preparation
If you have kids or plan to have them soon, a life insurance policy is a smart way to build an inheritance for them. Through a Life Insurance plan, your children will receive a fixed compensation after your death, which would not hamper their future dreams in your absence. You may also wish to name your partner as a beneficiary who will receive a death benefit in your absence. This will help take care of future expenses. Moreover, you can now buy Life Insurance plans, like ULIPs, Money-Back, and Endowment plans with maturity benefits. The maturity proceeds can also be passed on to your kids to strengthen their financial lives, provide higher education, or get them married.Separately, you can choose to leave behind a legacy which will be valued and treasured by those who survive after your death. You can commemorate your life’s endeavours by naming charitable or non-profit organisations as beneficiaries of your Life Insurance plan. This will ensure that your inheritance will go towards a social cause, which could make a remarkable difference in the lives of a few underprivileged people. You may also wish to choose to Also Read: What are Bonds? Meaning, Types & Important Terms
Medical provision
Securing healthcare services and settling medical bills are becoming more expensive each day. Treatments for terminal illnesses can span up to lakhs, and prudent financial planning is often required to cope with these expenses. A heavy financial burden would fall on your family’s shoulders in your absence, should they have to cover their health-related expenses later. Having a suitable Life Insurance plan is a great way to ensure that your family remains financially competent to deal with such expenses when they arise.
Lifestyle Protection
Marriage can bring about drastic changes to your lifestyle. Newly married couples may decide to shift to a new house, change localities or move to a different city altogether. Each carries significant costs, which couples may feel comfortable paying due to added income levels. However, this is why you should simultaneously invest in Life Insurance. Doing so guarantees your partner can uphold their lifestyle and match certain expenses even when you are not around.
Is Life Insurance cheaper when you are married?
Married couples have the advantage of buying a Joint Life Insurance policy, which is more affordable than buying two separate Life Insurance policies. So yes, in one way, Life Insurance does become cheaper after you get married. However, remember that premium rates may vary across married couples. That is because factors such as age, occupation, and pre-existing diseases, among others, affect the premium you pay under your plan.
Should both husband and wife take Term Insurance?
Whether or not married couples should buy individual Life Insurance plans or own a Joint Life Insurance policy mainly depends on their income levels. If one member is financially dependent on the other, it’s logical to opt for a plan that covers both under one banner, as it is cheaper than buying two separate plans. However, keep in mind that Joint Life Insurance policies have lesser scope for customisation. For instance, the coverage amount and policy term must be the same for both parties. Additionally, only a single death benefit payout is provided. To overcome these limitations, both parties should ideally buy individual Life Insurance plans if they can afford to do so. Also Read: What is a Home Loan - Meaning, Types & Benefits
Key Takeaway
- Several important reasons make Life Insurance a must-have after marriage. For one, they help secure the collective financial goals of you and your spouse.
- If you have taken a large loan after marriage, buying a Life Insurance plan is one way to ensure that your loan burden does not fall upon your family’s shoulders when you are not around.
- A Life Insurance plan is a great way to leave behind a legacy for your children. You can also do the same for any charitable organisation or a trust fund by naming them as beneficiaries under your Life Insurance plan.
- Look for a top insurer online or consult a reputed insurance advisor to know more about the benefits of all the different Life Insurance policies and make the right buying decision.
- Buying a Joint Life Insurance plan is cheaper than owning two separate plans. However, customisation options may be limited.
FAQS - FREQUENTLY ASKED QUESTIONS
Is Life Insurance necessary if you do not have children ?
While the financial needs may differ for couples without children, Life Insurance can still be beneficial. It can help your spouse maintain their lifestyle, cover outstanding family debts, and provide for your family’s future needs. It can also help ensure they have the resources to handle unforeseen expenses or emergencies.
What if my spouse has their own income and financial stability ?
Life Insurance can offer benefits even if your spouse is financially stable. It can help cover joint financial obligations like mortgage payments, car loans, and other shared debts. Additionally, it can provide funds to cover childcare, education expenses, or other costs associated with raising children.
Does Life Insurance become more expensive after marriage ?
Various factors, such as age, health, coverage amount, and type of policy generally determine life Insurance premiums. Getting Life Insurance earlier in life, such as after marriage, often means you can secure coverage at a more affordable rate. The younger and healthier you are, the lower the premiums.
Should we consider getting Life Insurance together as a couple ?
Joint Life Insurance or separate policies for each spouse may be suitable depending on your specific circumstances. Joint Life Insurance covers both spouses under one policy and pays out upon the first death. Separate policies provide individual coverage for each spouse and can be customised based on their needs. Discussing your goals and consulting with a financial advisor or insurance professional can help determine the most appropriate option.
Can I include additional riders or benefits to my Life Insurance policy after marriage ?
Yes, many Life Insurance policies offer additional riders or benefits that you can add to enhance your coverage. Some common riders include Critical Illness, Accidental Death Benefit, Disability, and Waiver of Premium.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
