Is getting married a reason to increase life insurance?
[social_share]One of the problems that people have with life insurance is that they can have what was a sufficient amount of life insurance five years ago, but which is now far too much or far too little. Sometimes this happens when commitments are building up quietly but are not being noticed, this is one reason why it is a very good idea to have an annual review of all finances, including life insurance.
However there are times when commitments change very radically, or they are going to change radically, and one of these lifestyle events is when a person gets married. Although marriage is less of a life changing event than it was even a generation ago, when it was quite common for a wife to give up work or to radically drop the hours that she was working, it still is a big change for both parties.
One of the preparations for marriage should be a thoroughgoing financial review of both parties looking at a number of issues, including transaction accounts, writing wills, pension coverage and outstanding loans. These things can change over the first few years of marriage, but there should be a review as part of the marriage preparation. Most married couples will spend longer arranging for the cars to the wedding than they will on dealing with their future financial lives.
One of the most important things that should be reviewed is life insurance coverage. The first thing that should be looked at is who the beneficiaries for the life insurance coverage are. In many cases it may be a former partner, or even parents. These things should be looked through. It is quite easy to change the beneficiary of the life insurance policy, and this should be done fairly quickly.
The next thing that should be done is to look at whether the life insurance is adequate, for both parties. There are three things to consider here – the current dependence on earnings, the mortgage and any other debts that are outstanding and future needs – particularly if children arrive.
Many people when they marry will either not have life insurance, or will only have life insurance from work. It is usually a good idea to keep current life insurance as there will be a benefit from premiums that have been paid before, but to take out new policies if there is a need to extend life insurance coverage.
