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  • Latest Insights

    Newlywed tips for blending insurance benefits

    Financial Planning

    Key takeaways

    • An obvious starting point is comparing health insurance plans to see which offers the most appropriate benefits for the most affordable costs.
    • There are various types of life insurance. Examine which type may best suit your protection needs and family plans.
    • Your marriage could change home and auto insurance costs. Investigate the options.

    Newlyweds have much to discuss when it comes to money management, including bills, budgets and long-term savings goals, but all too often an important component of their financial safety blanket gets overlooked – insurance.

    Indeed, a careful look at workplace health, disability, life, auto, and homeowners insurance in the weeks immediately following your walk down the aisle can help to maximize your coverage, protect your spouse and preserve financial stability in your home. It may even save you some extra cash to help pay off that honeymoon.

     

    In sickness and in health: Benefits

    Health insurance benefits are an obvious starting point. If one spouse has employer-provided benefits and the other does not, it is generally cost effective to add the person without workplace benefits to that plan. If both spouses have coverage available through their jobs, however, a little research is in order. First, each partner should discuss the upcoming change with human resource professionals at their respective jobs to learn how coupling health insurance impacts each policy. You may need to wait for an open enrollment window to add your spouse or leave your plan. Some companies now charge more to cover family members who have access to their own employer-sponsored plan, and, according to the Insurance Information Institute in New York City, some may not cover spouses who have their own workplace plans at all. If you can add each other to your health insurance plans, compare not just the premiums and out-of-pocket costs (copays and deductibles) available through both employers, but the coverage provided as well, said Meyer.

    One plan may consume more of your monthly paycheck, but offer fewer network restrictions on the doctors you can see. Other considerations include:

    • Does either plan cover visits to your current primary care physicians?
    • Do they both have affordable copays for an important prescription?
    • Does the plan with higher costs offer more perks that justify its value?

    To determine which insurance plan is the better value for your new family, you will need to evaluate your current and projected health care needs.

     

    Lessons in life insurance

    Life insurance may be an important part of financial planning, but it is an easy topic to avoid. A 2022 LIMRA survey found only 63 percent of Americans own life insurance despite the fact that 70 percent of respondents believe it is the right thing to do.1

    Life insurance is designed to help protect your loved ones financially in the event you die or become incapacitated. Coverage options, however, can be complicated. To determine which type of life insurance policy suits your needs, you will need to educate yourself on the types of plans available.

    Whole life policies, for example, provide a guaranteed death benefit for your beneficiaries after you die, but also accrue cash value that can be used during your lifetime to finance large investments such as college for your children or medical expenses during retirement. (Be aware, though, that tapping into the cash value of a life insurance policy reduces its value and death benefit and increases the chance the policy will lapse.).

    Term life insurance, on the other hand, provides a death benefit only if you should die within a specified period of time. It has no cash value and it provides no payout if you live beyond the designated term. As a result, term insurance policies are less expensive than whole life policies.

    Disability income insurance, which is designed to help replace lost income if you are no longer able to work due to injury or illness, is another important consideration, he said, noting a long-term disability is statistically far more likely than premature death. Many employers offer life and disability insurance at a discounted rate, but it may not be enough depending on your coverage needs.

     

    Homeowners insurance

    Couples who say “I do” later in life and those who were previously married often bring separate assets to the marriage, including real estate.

     

    Auto discounts

    You could also lower your collective car insurance premium by changing your marital status and signing up for a joint plan. According to one auto insurance researcher, married drivers are safer on the road than singles, and often pay lower premiums. Married men, in particular, could see their auto insurance rate fall. Statistically, men are more likely to get into accidents, have more driving-under-the-influence of alcohol accidents (DUIs) and fewer serious accidents than women. Combining policies post-marriage, however, does not automatically result in savings. The driving records of both you and your spouse will be factored into your new premium. Thus, if your spouse has multiple tickets or accidents on his record, your rates may actually rise. It may also make sense to maintain separate policies if your spouse drives a car that is pricier to insure (like a classic car) or travels many more miles per day or month than you.

     

    Conclusion

    As you blend your household finances, do not forget to consider the impact your marital status may have on your health, home, auto and life insurance policies. With a little research and careful planning, you should be able to consolidate your coverage cost effectively and protect who matters most.


    LIMRA, “2022 Insurance Barometer Study,” 2022.

    MM202507-302159