Do Married Couples Need Life Insurance?
Life insurance for married couples should be a priority in your financial planning.
Whether you just got married, or you’ve been married for years, there’s no worst scenario than the death of your spouse.
That’s why it’s important to prepare for it.
Here are some situations where you might want to protect your family with life insurance:
For a younger married couple in these types of situations you may want to consider level term life insurance.
Why? Because level term is the most popular type of life insurance for a number of reasons: It’s easy to understand, it’s the most affordable, it’s flexible – offering coverage for 10, 15, 20, or 30 years.
Term life insurance is only a death benefit of a specified amount for a level amount of time, and the premium is extremely cheap for healthy individuals.
Permanent life insurance provides lifetime protection and builds cash value, but the premiums are usually 2-3 times higher than term life.
If you’re on a budget, or you want the most life insurance at the lowest price, consider term life insurance.
Don’t use a life insurance policy for your retirement investing. Use mutual funds, index funds, and real estate for your retirement nest egg. Life insurance is for protecting the ones you love, not as an investment tool.
Consider buying at least 7 to 10 times of your yearly income. So, if you make $60k a year, then you should buy $420k to $600k in term insurance.
The idea here is that your spouse could take that money, invest it in a good mutual fund or index fund, and replace your monthly income with the monthly interest from the lump sum death benefit.
Life insurance proceeds are usually paid free from federal income tax.
To determine how much life insurance you need, you can use the life insurance calculator.
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Remember, whether one of you works, or you both work, you both contribute to your family. So, it may be a good idea to buy life insurance for both you and your spouse.