Lifestyles > Married > Married Blog > April 2018 > You hope for the best after marriage, but you have to plan for the worst
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You hope for the best after marriage, but you have to plan for the worst

Introduction

It’s not something anybody wants to think about, but no one can deny that there is always the possibility that you could end up leaving this world, before your time. So, you have to face the reality and prepare for the worst-case scenario.


It’s not something anybody wants to think about, but no one can deny that there is always the possibility that you could end up leaving this world, before your time. So, you have to face the reality and prepare for the worst-case scenario.

How do you prepare? Well, first and foremost, you and your spouse need to just sit down and have a proper discussion about your situation and what’s needed, in the unlikely event that one of you passes away suddenly. This of course would include the financial aspect, and that’s where life insurance comes in. It’s not an easy conversation to have, but it’s an important one, which all married couples need to have.

Some of you may say that you already took up an insurance policy before you got married, and you could just include your spouse as a beneficiary. Well in this case, you have to realize that what you might have taken into account when you drew up that policy, was not as a couple, and your priorities and responsibilities have changed significantly since tying the knot.

Why do you even need life insurance?

Should you pass away, then your spouse would have to carry double the financial burden that he or she had. This includes housing loans, car loans, or any other debts, as well as the daily family expenditure and the needs of your children like their schooling fees and such. Instead of two people sharing the responsibilities, now one person has to be able to cover all these expenses.

However, when you have life insurance, then your spouse will be financially secure and stable. Not only will the pay out compensate for your income, it will also cover the funeral and other expenses for your passing. This is also healthy for your spouse as he or she will be allowed time to grieve, instead of keeping pent-up feelings in order to deal with the financial needs of the moment.

Don’t think you need life insurance right now? Do think again.

Perhaps you’re thinking that you and your spouse are still young, and you don’t need to get a life insurance policy so early on. Well the thing is, the longer you wait, the more you have to pay for the policy.

When insurance companies provide you a policy they consider many different things, including the risk you pose to them. For example, the older you get, the more prone you are to certain health problems, and this increases the risk of the company having to pay out for your medical bills. Taking this into account, they would charge a higher premium for your policy because of the higher risk involved.

So, the younger and healthier you are, the lower the premium you have to pay, and it’s also much easier to get your policy approved.

Things to consider when choosing your policy

There are a wide range of policies available, and they may differ from company to company. So, you need to find the one most suitable for you, your spouse and your family. Just like making any other decision, you have to weigh the pros and cons of all the options you have available.

There are two main types of policies, the Term Life Insurance Policy and the Permanent Life Insurance Policy. The former will basically be in force for a pre-determined timeframe, with 10, 20 and 30 years being the usual options. So, once you’ve seen through the period of the policy, then it is no longer valid, and you would have to get a new one to insure yourself. Meanwhile, the latter remains in force throughout your lifetime, as long as you pay your premium.

Most policies nowadays also build cash value, and the amount or percentage would depend on the amount you’re covered for and your premium. This part of the policy also has certain tax benefits. Plus, you can also use it if you ever need to take out a loan.

Another type of policy that might be of interest to you is the Joint Life Insurance Policy. There are two different versions of this. One is the first-to-die policy, which means that if one spouse passes away, then the insurance will be paid out and the policy is no longer valid. The other is the second-to-die policy, which means the insurance is only paid out when both the husband and wife have passed away. The money will usually go to the children, but you may also name any beneficiary of your choice.

Another important aspect to think about when getting the right policy for you is of course the amount you want to be insured for. The amount covered can start from as low as $25,000 to millions of dollars. The larger the amount you’re covered for, the higher the premium you will have to pay. Therefore, the trick is to find the right balance between the two, with a premium that you feel you can afford, and a coverage that you think is financially secure.

Among the things to consider when thinking about the amount you need to be insured for are your debts and your daily expenditure as a family. You should also think long-term, by taking into account how many children you plan to have and if you plan to move to a bigger house or get a bigger car to accommodate your growing family, as all these would accumulate more debts. The current age of your children also plays a role, because you need to calculate according to how much longer you have to care for them, before they can be independent and earn on their own.

Finding the right advice

Not sure what to buy? At myChoice you can find a Life Insurance or Family Takaful advisor nearby. Our advisors are fully licensed to help you find out what exactly you need and help you choose the best option available.

Posted by admin on 10 April 2018

Filed under: #Married