You’re newlyweds and likely have two decent starting incomes, an apartment and a couple of cars.
How much life insurance do you need?
Right now, probably not a lot. You’ll want enough to cover potential funeral expenses and outstanding debts, such as car loans, student loans and credit cards.
And, as you’re both still young and have no dependents, you may reasonably conclude that it is unnecessary to insure (replace) each other’s earning potentials.
Does this mean newlyweds shouldn’t consider purchasing a substantial amount of life insurance? The answer hinges largely upon expectations of having children.
“When you have children, your world view and sense of accountability and responsibility changes,” says Gary Lardy, CEO of IntelliQuote, a leading online life insurance agency. “Although not always the most comfortable discussion to have right after marriage, it is a critical topic to consider.”
In addition to childrearing costs and saving for college, the loss of a spouse’s second household income makes saving for a down payment on a home or for retirement much more difficult.
So, the big question – are you planning on having children?
If yes, know that life insurance is age and health-based. Therefore, it is less expensive to purchase when you’re young and healthy. Low premiums can be locked-in for extended periods of time, even for life. Increase in age and changing health due to medical conditions and disabilities however, can quickly make obtaining adequate coverage more difficult and more expensive.
Ironically, the best time to buy a policy is when you don’t really need it – so that you’ll have it, and be able to afford it, when you do. “Buying life insurance is easier than ever, and there are so many variables and options to consider,” says Lardy. “Even if you have life insurance now as newlyweds without kids, once you have children, you should reconsider your coverage and benefits. Having children is a game-changer for long term financial considerations.”