| Friday, November 20, 2009 |
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Getting Married
Congratulations! You've found the love of your life and you have decided to tie the knot! In addition to planning the rest of your lives together, it's important to tie together your insurance programs. Some of your insurance policies, such as your health and auto insurance, can be consolidated to save you money. Furthermore, new types of insurance policies such as life insurance may be necessary. To get started, both you and your spouse should organize all of your insurance polices, including those insurance benefits provided at work. It's important to evaluate the following types of insurance: auto, life, home/renters, health and disability insurance. Auto Insurance There's more good news when you get married. You'll probably be able to save money on your auto insurance as well. Maybe you can use the money you save to help pay off the bills from your wedding and honeymoon! Of the factors insurance companies use to determine the price of an auto insurance policy, marital status is one of the most important. Insurance companies have actuarial data that shows married people are less likely to have car accidents. Insurance companies also give discounts if you insure two or more cars on the same policy. If both you and your new spouse each have a car, you should look into combining the coverage into one policy. Lastly, if you and your spouse own a home, look into getting your auto insurance coverage with the same company that insures your home. Many companies give discounts if you obtain coverage for multiple insurance products with one company. Life Insurance You may not have had life insurance coverage before you were married; however, there's a good chance you'll need some now. Getting married usually adds some form of financial dependency between spouses. If both you and your spouse earn incomes, each of you may be financially dependent on the other's income to maintain the same standard of living. In this case you should both have life insurance coverage to protect the other should one of you die prematurely. If only one spouse earns an income, then he or she should have life insurance coverage on his or her life. The spouse that does not have an income may need life insurance coverage even though the other spouse may not rely on him or her financially. If the spouse that has no income is a parent, life coverage may be needed to cover day care expenses, or if there is any debt life insurance coverage may be needed to pay it off. For more information on determining the amount and type of life insurance you may need, visit the Life 101 section. Home/Renters Insurance Home or renters insurance is often overlooked when people get married. While it may be obvious that home insurance is necessary if you buy a home, and renters insurance is needed if you rent a home; what happens if one spouse simply moves into a home that the other already owns or rents? What should happen but often does not, is that the home or renters' insurance policy should be updated. Getting married does not change the value of a home; however, it does change the value of the contents inside the home. A home or renters insurance policy should be adjusted when one spouse moves into a home with the other. That spouse probably has property that needs to be protected such as clothing, furniture and jewelry. The existing personal property limits on the home or renters insurance policy should be adjusted to account for the increase in value of the assets located in the home. Furthermore, personal article floaters may also need to be added to protect high value property such as jewelry that may not be covered in full under the insurance policy. Health Insurance As a newly married couple you'll probably be blessed with wishes from friends and family that you enjoy good health and prosperity in your new life. In order to enjoy good health, you'll need to make sure your health insurance needs are properly addressed. Whether you both have health insurance coverage or not, review your options. If both you and your spouse have coverage, you should find out if it may make more sense for one of you to join the other's health insurance plan. It may be more cost effective, and one spouse's health plan may provide more benefits than the other spouse's policy. On the other hand, if one spouse has health coverage and the other does not, then look into adding that spouse onto the exiting health insurance plan. Group health insurance policies allow employees to add other family members to their plan on the anniversary of the group policy or upon special events such as marriage or the birth of a child. If both you and your spouse have no health insurance, then now's the time look for affordable coverage. First see if coverage is available through your employer because group rates are often less expensive than buying an individual policy. Also, if health insurance is available through your employer you may be able to pay for your monthly premiums before tax if your employer has established a cafeteria plan. Inquire with your human resources or personnel manager about your options. Disability Insurance One of the most often overlooked, yet most important types of insurance is disability insurance. Whether your married or single, disability insurance is a necessity unless you're a millionaire. Disability insurance protects your ability to earn an income by replacing a portion of your lost income should you become disabled. Your employer may or may not offer disability insurance coverage. It's important to find out if coverage is offered and; if so, what type. There are two basic forms of disability insurance coverage: short-term and long-term. Each can be purchased as an individual or group policy (a group policy can only be offered through an employer or affinity group). Short-term Disability Insurance - As its name implies, short-term disability insurance provides benefits for a short period of time, usually three to six months. This policy normally has a waiting period of 7 to 14 days (the period of time you must wait from the start of your disability before benefits become payable). Long-term Disability Insurance - Long-term disability insurance provides benefits for a longer period of time which can be anywhere from two years to lifetime. The most common benefit period on a long-term policy is to age 65. In addition, this policy can have a waiting period of 30 to 365 days (the period of time you must wait from the start of your disability before benefits become payable). If you have any liquid assets, such as stock or money in a savings account, you may not need short-term disability insurance if the assets' value is large enough to cover your monthly expenses for three to six months. On the other hand, your liquid assets probably would not be sufficient if you had a long-term disability See Also: Buying a Car Starting a New Job Buying a Home Renting a Home Becoming a Parent Getting a Divorce Loss of a Loved One Child Leaves Home Retirement Prep |
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