Being in a marriage where both partners work can be a great thing. Just look at all the working couples around you—they are earning well and living the good life. But how many of them, including the financially-savvy ones, are insured?
Couples generally postpone their Life Insurance buys to after their children are born. Even though they consider insurance to be a crucial aspect of their financial planning, there is no hurry to buy coverage, certainly not in the early years of marriage.
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This is where couples get it wrong. Let me explain why.
1. Comfortable Cash Flows – If both partners are working, there is nothing like it. You can now start saving for those life goals (kids, buying a house, retirement) without straining your budget. It is best to start early, before children, homes loans and the like enter the picture.
2. Sudden Disability, Illness. – It all seems rosy in the early years of marriage, but you never know what the future might bring. What if an accident or illness were to prevent one of you from working? Income protection could be a blessing in such situations.
3. Outstanding Liabilities- Even in the early years of marriage, property-hungry couples may take a home loan to buy an apartment or an auto loan to purchase a car.
If one of you dies or loses the ability to earn, will the other partner’s income be sufficient to meet the debt payments? Insurance could help immensely.
4. Financial Loss of a Spouse – No amount of money can compensate for the death of a spouse. But a life insurance payout that arrives soon after your spouse’s passing could cover funeral costs and help you tackle the additional financial burden on your income.
5. Rising Healthcare Costs – Since both of you are working, you probably have health coverage at work. If you feel the need for more coverage or more specific coverage, talk to your health insurance provider.
Out-of-pocket medical expenses can leave even the best of us broke.
6. Delaying Kids – You may not be planning for kids right now, but do want kids somewhere in the future. In such a case, do not delay buying insurance.
Effective insurance planning could help you avoid the financial strain of supporting dependent kids when you are a 60-year-old on pension.
Must-Have Insurance for Working Couples
Life Insurance: Childless couples with no dependents can consider buying joint life policies. These offer cheaper premium rates and pay out when the first of two partners dies.
If you have kids and/or other dependents, however, it is better to purchase separate policies. Each policy will then compensate for the financial loss of each individual.
How much life coverage do you need? List out your regular expenses, account for inflation and identify future costs.
Also put a price on the household chores that the two of you carry out free of cost—if either of you are absent, you may have to pay a housekeeper to perform those tasks.
Health Insurance: As mentioned earlier, working couples must also purchase adequate health coverage. Purchase early in life, so that you benefit from the cheaper rates offered to younger customers. Opting for higher deductibles also help keep premium rates affordable.
The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal.