Five Insurance Tips for Married Couples
Whether you've dated forever or had a whirlwind romance, enjoyed a big wedding or kept it simple, one fact appears to be almost universal – those first months and years of marriage are a big adjustment.
Money matters are a source of potential conflict once the honeymoon is over. According to information from an Allstate Life Tracks survey released earlier this year, just half (50 percent) of Americans said they have money left over at the end of the month after paying for essentials.
"In real life, it's no laughing matter when partners have different approaches to financial matters but don't talk much about it before they marry," says Don Civgin, president and chief executive officer of Allstate Financial. "As you focus on the obvious money decisions, such as developing a joint budget and savings plan, insurance may be put on the back burner. That can be a big mistake."
Below are five insurance tips for newlyweds:
Assess your insurance needs. Make sure you have the right amount of homeowners' or renters' coverage for your newly combined possessions. Don't forget to insure your beautiful and costly-to-replace engagement ring via an insurance rider to your homeowners' policy. In addition, you may want life insurance to help repay the mortgage and take care of your children, should one of you die unexpectedly. Depending on your age and personal health situation, you also may want to consider disability insurance.
Consolidate your financial relationships. You each may have an accountant, insurance agent and financial planner. Now that you're a family, you should choose a single relationship in each area – whether that is a current advisor or someone new to both of you. You can rely on referrals from family or friends, or ask for a referral from other professionals you currently deal with and trust. For example, your insurance agent is likely to know financial planners in your community. A financial planner may be able to refer you to a local attorney or accountant.
Update your records. Make sure you are the beneficiaries of each other's existing life insurance policies.
Combine your "just in case" files so that you can quickly find important financial documents just in case one of you is incapacitated or dies unexpectedly. The files should include insurance policies, wills and other legal documents (such as trusts, durable powers of attorney, living wills and healthcare proxies). Store originals in a safety deposit box and make sure each of you signs the form to have access to the box.
Consider combining your health insurance. If you both have health insurance through work, compare the coverage to see if it makes sense for both of you to be covered under one of the plans. It's likely to be less costly to insure an employee and spouse under a single plan. Many plans allow you to add a spouse within 30 days of your marriage without providing proof of insurability. Depending on your personal health situation, you might consider supplemental health insurance, which can help with doctor bills, hospital stays and even nonmedical expenses (such as transportation) if you're dealing with an accident, disability, cancer or critical illness.