Life insurance for newlyweds

Just married?

Congratulations to all the newlyweds out there. When the honeymoon is over, and reality kicks in, protecting each other both with emotional and financial support is tantamount.  After all, this is what partnership is all about and the vows taken by you as a couple reflect this.  Now is the time to consider a unique wedding gift to each other!

When young couples set out as a married couple, they may wish to buy a house and have children.  Planning is exciting, and the last thing on their minds is dying.  However, having an awareness of the possibility of one partner dying is crucial. According to the Child Bereavement UK organisation, “a parent of children under 18 dies every 22 minutes in the UK; around 23,600 a year. This equates to around 111 children being bereaved of a parent every day”.

These are extremely sad and shocking statistics, but you have the ability to protect your loved ones should the worst-case scenario happen.

Receiving advice and help to understand the range of options available should be at the top of the wedding list and sorting out this aspect of newlywed finances need not break the bank if the newlyweds are young and healthy. Young couples are low risk, and therefore, the monthly premiums and range of companies in this a competitive market offer low cost policies. You could see your monthly premiums from as little as £10 per month.

Insurance companies use risk to calculate premiums for life insurance is based on risk, with the following factors being essential elements:

  • Age
  • Smoker/non-smoker
  • Type of life insurance policy required
  • Length of term
  • Sum covered

Other issues affect premiums, such as:

  • Pre-existing health issues
  • Hazardous occupations
  • Professional sport players
  • Extreme or dangerous hobbies

The higher the risk, the more expensive the premium!  If you’ve ever been refused or declined a life insurance policy, contact our team of dedicated professional advisors to discuss various solutions and options.

Do newlyweds need life insurance?

As a newly married couple, you will need to consider each other’s circumstances and plan accordingly. Ask yourselves the question: “If I were to die, what impact will my death have on my loved ones”? On the other hand, “financially would my wife/husband/partner/children suffer in any way if I were to pass away”?

How would they cope with the following?

  • Monthly mortgage repayments
  • Other monthly repayments such as debts or car finances
  • Everyday household bills and shopping
  • Childcare
  • Savings for the children’s future such as university etc.

If you were no longer around, your other half would carry the burden of these costs alone, how would they manage financially? Would they suffer?

Funeral costs are rising

According to recent figures, an average funeral might cost more than you think. Shockingly the cost of dying might even set you back a cool £8,000. (Source: SunLife Cost of Dying Report, 2017). Of course, there are cheaper options, but would your family manage to find the funds if you were to suffer an unexpected early death? This financial burden is avoidable and affordable, simply by including this aspect of cover within your life insurance policy.

Newlyweds with a mortgage should take out life insurance

It makes sense that a joint mortgage will be difficult to pay if one partner were to pass away. Imagine your loved one struggling to meet the monthly payments, falling into debt and possibly repossession. Taking out a life insurance policy mitigates this financial burden, acting in a gallant way to ensure the surviving partner will continue to live in the family home comfortably, without the added strain of worrying about the monthly mortgage repayments.

Raising children and childcare costs

According to recent studies, the overall cost of raising a child from birth to the age of 21 is approximately £227,226 (Source: CEBR report – Cost of Raising a Child).

Childcare costs for any family, let alone one-parent families, have escalated in recent years, according to one article by the Financial Times, childcare in some regions of the UK is a staggering £9,100 per year.

It is, therefore, essential that parents consider this when planning a family.  Life insurance will cover such costs of raising a child if one parent were to pass away.

Life insurance will provide the peace of mind, especially for the primary breadwinner, knowing that loved ones will cope financially.  In addition, for a stay at home parent, life insurance is vital to have in place.  Life insurance paid out to the primary breadwinner will cover future costs of childcare, or ease the financial burden of monthly bills enabling that parent to spend time with the children and provide significant financial and emotional support.

How much life insurance do newlyweds need?

Grab a pen, paper, and calculator to work out the amount of cover required.  Make a list to take into account the following:

  • Total mortgage balance remaining
  • All debts and car costs
  • The number of years of lost income (10 is a good starting point)
  • Childcare costs if the surviving parent remains working
  • Ages of children or other dependents
  • Household living expenses including bills and shopping
  • Regular payments to savings

Talk these figures through with each other.  Ensure that you both agree.  Consider the rising costs of living and think about future-proofing your children’s education needs.

What is the best life insurance policy for married couples?

For many newly married couples, the best life insurance policy is often the most affordable one available. There are several options to choose from, but perhaps the most popular (due to its cost-effectiveness) is a decreasing term life insurance policy. A cheaper choice of life insurance due to it taking into account the decreasing payout in line with the mortgage balance. Whatever happens, the policy will cover any mortgage balance, plus any debts requiring cover under this type of policy.

Another option is level term life insurance where thecover remains fixed, regardless of when you pass away. For example, a life insurance policy with a payout of £250,000 to cover a mortgage will pay out £250,000 even in the event of a paid off in full mortgage within the term of the policy.

If children are a substantial part of future plans, then family income benefit is a advantageous policy to consider.  Essentially this policy replaces a lost income for a fixed term. Family income benefit provides loved ones with a regular monthly payment up to £5000, easily sufficient to cover mortgage and household regular payments. The beauty of family income benefit is that it is a tax-free monthly payment.

What about life insurance for couples getting married in their 50s?

Healthy couples who marry later in life have some life insurance choices. One to consider is whole of life insurance that will last for a lifetime and provides a guaranteed payout when you pass away. The option of the whole of life insurance does involve some health checks and more expensive premiums. Equally important is to ensure the correct level of cover; too much cover is a waste of money, too little will leave the insured wishing they had bought more. Our trained advisors will help you to calculate and determine how much cover exactly you require.

For non-smokers, a cheap life insurance option for newly married couples is the over 50s life insurance policy. Popular due to its eliminated requirement of health checks and affordable premiums. However, the cover provides less cover,  but still a  preferred option for many over 50s due to its ability to cover expensive funeral costs or to leave an inheritance for loved ones.

Newlyweds looking for cost-effective methods of life insurance will find that most insurance policies allow for joint life insurance — certainly a cheaper option but with some caveats to bear in mind. A joint policy is actually one policy split between two people, and when one partner dies, the policy expires after payout. The surviving partner will need to take out a new policy if the cover is required to continue.

What about critical illness cover for newlyweds?

Critical illness cover can form part of your life insurance policy, or provided separately as stand-alone cover. It is possible (and essential) to check the essential illness definitions as found in the list of illnesses covered by the insurer.  Cover can help pay your mortgage, rent or debts, also with private medical treatment, home alterations.

Another consideration is terminal illness cover, often this comes as standard with most life insurance policies and will provide an early payout in the sad event that you are diagnosed with an illness dramatically shortening your life.

In conclusion

Calling all newlyweds! It is crucial to realise the benefits of life insurance. It need not be expensive, especially for young, healthy couples and premiums fixed, saving money over the long term.

Speaking to our dedicated team of advisors will help you to tailor your cover to match your budget. For as little as £10 per month, your partner will not have the extra burden of money worries in this challenging time dealing with the loss of a loved one.

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