A Newlyweds’ Guide to Life Insurance

Life insurance for newlyweds may not be your focus on the big day. But after your married (ok, after the honeymoon), it’s a key topic for young couples.

Many people don’t think about getting life insurance until they have kids. After all, you’re not really responsible for another person until you become a parent, right? Well, that’s right and wrong.

You may not need loads of life insurance as a newlywed couple, especially one without children yet. But you likely need at least some basic life insurance coverage.

We won’t dive too much here into how much life insurance you need. Just know that if you couldn’t easily pay out of pocket for the following expenses in the untimely event of one spouse’s death, you probably need some coverage:

• Funeral and end-of-life costs: In 2014, the median cost of a funeral with a viewing and burial was about $7,000. And, remember, that doesn’t include any costs associated with an unexpected accident, hospital stay, or lengthy illness. Those can really add up. Unless you have enough in savings to cover the costs, you need some life insurance coverage.
• Mutual debts: The financial fallout from one spouse’s untimely death can be huge, especially if you have outstanding mutual debts. Not all debts will automatically pass to the surviving spouse. But if both names are on the credit card or outstanding debt, those will. It’s best if you can pay off all or at least most of these debts with life insurance proceeds.
• Time to grieve: Unless your workplaces have generous time off policies, chances are the surviving spouse will need to take additional time off to deal with funeral arrangements and simply to grieve. It can be a good idea to build in enough life insurance for the spouse to take a few months off after an unexpected death.

The bottom line is that if you can’t easily handle expenses like these out of your savings accounts, you need life insurance.

In addition, life insurance is a must if one spouse relies on the other for support. The loss of income where only one spouse is working can be financially catastrophic.

The good news is that term life insurance, the type we’ll cover here, is pretty cheap. For just a few bucks a month, you can get peace of mind that your spouse will be taken care of in the event of your untimely death.

Keep in mind that there are other types of life insurance, such as whole life insurance. This is the right option for a few couples. But for most, term life insurance is the way to go.

Our Top Pick

State Farm life insurance is well-known for excellent customer service. Their online platform isn’t as pretty as others, but it’s quite functional. From the online application, you can look at different types of life insurance, get quotes for different terms, and add riders to your insurance policy.

I picked State Farm for newlyweds, specifically, because they’re one company that offers lower coverage amounts. With many companies, you have to buy at least $100,000 in life insurance coverage. But with State Farm, you can go down to $50,000. This can be helpful if you don’t have much money to pay monthly and only want very basic life insurance coverage.

The $50,000 amount is only available in State Farm’s Instant Answer Term product. This product guarantees the insurance for 10 years or until you’re 50 years old. It’s an affordable option and a way to skip the hassle of medical verification. (Though, keep in mind, if you’re in good health, medical verification can actually work in your favor.)

When I got a quote for a 32-year-old woman in good health in Illinois, State Farm said I could get a $50,000 Instant Answer term policy for $19 per month. Not bad at all!

Of course, the company has a myriad of other term insurance options. And it has a solid financial rating from A.M. Best and some of the industry’s best customer service reviews.

Runner-Up

I am all about ease of application when it comes to life insurance policies. And Haven Life’s online application couldn’t make it easier. It offers medically underwritten life insurance. If you’re young and healthy, this is actually a good thing. It likely means you’ll pay less in insurance premiums than you would without medical underwriting.

Haven is an offshoot company of MassMutual, an old company with a great financial rating. So you know your life insurance policy will be safe with Haven.

Haven’s lowest policy amount is $100,000, but their lowest term is 10 years. That’s helpful if you aren’t sure what the future holds for you and your new spouse. Maybe you don’t think you’ll need longer-term life insurance. You can save money by opting for a lower term. In fact, their estimator showed that a 32-year-old woman in average health could get a $100,000, 20-year policy for about $12 per month! Not bad at all.

Haven generally has good customer service reviews online. And their application process is smooth and simple. You’ll just have to wrap up your application with medical underwriting. But, again, this is ultimately worth making the time to do.

Our Selection Methodology

When it comes to life insurance for newlyweds, I had a few criteria driving my selections. One major factor was the flexibility of terms and death benefits. State Farm came in first because it offers a reasonably low death benefit. This can be helpful if you’re not looking for enough coverage to set your spouse up for life if something should happen to you. And Haven’s 10-year-term availability is also helpful if you don’t need long-term life insurance.

I also wanted to highlight companies with easy online application processes. Most of the time you have to take follow-up steps, but it’s nice if you can kick off the process online.

I also looked at the types of policies and riders that were offered. For instance, you may choose to add an accelerated death benefit to your policy. This would let you cash in on the insurance policy early if you became terminally ill. It’s a good extra protection to have, just in case. Another option to consider is disability benefits. With some policies, you can pay a bit more up front but keep your life insurance, with waived monthly premiums, if you become permanently disabled.

As you can see above, I kept the policy considerations pretty small. When price shopping, I looked at policies for a 32-year-old female in average health. I looked at either $50,000 or $100,000 policies with a 20-year term.

Top 6

1. State Farm

State Farm always ranks near the top on customer satisfaction surveys. And they have a solid financial rating. Plus, like I said above, they offer low death benefit amounts and flexible rider options that might suit you. Basically, you can apply online and create your customized life insurance solution as you go.

2. Haven Life

Haven is great because it has the financial backing of a much larger and older company. It consistently gets high ratings for its online application process. And it has short term limits available, which can be helpful if you don’t need longer-term life insurance.

3. Principal Financial

Principal is a great option for people who are in really good health. You’ll need a great blood pressure reading and no history of tobacco use for the past five years to qualify for the best rates. But if you can meet those requirements, you could get really cheap life insurance from a highly-rated company. Principal offers an online quote tool that helps you decide how much insurance you need and recommends three different coverage levels.

My quotes ranged from $23 to $57 per month for $500,000 to $1.5 million in coverage. (Unfortunately when I tried to rig the numbers in the calculator to come out with a lower amount, it told me I didn’t need life insurance. Points for honesty, I suppose.)

4. MetLife

MetLife is rated as highly financially stable, and it offers medical-exam-free health insurance options for up to $500,000. It also offers flexible terms. You have to fill out a form online to get your quote, but that kicks off the application process. If you want to get approved for life insurance quickly, MetLife is a good place to start.

5. Primerica

Primerica is actually where my husband and I have our life insurance policies–ones we bought as newlyweds. It’s a more complicated application process, which brings it down on my list. You have to actually talk or meet with a representative from this MLM-style company. But once you have the meeting and medical exam, finishing the application process is pretty simple.

I feature Primerica here mainly because they offer a term life insurance product that can work well for newlyweds. It’s a term policy with an optional increasing death benefit. Each year, I get the option to increase our death benefits incrementally. The costs go up a bit, too. But this means you can start out with a small policy that automatically grows as your income or family do. You may be able to avoid layering on additional term life insurance policies if you qualify for one of these options.

6. AXA Equitable

AXA Equitable is one of the lesser-known life insurance companies on this list. But it has good customer service and financial ratings. And I feature it because it has a couple of interesting options. For one thing, you can get a single year’s worth of life insurance coverage. This can be a good way to bridge a gap in employer-paid coverage, for instance.

But the other option is that you can choose to pay increasing premiums. These premiums start off lower than the market rate but gradually increase with a level death benefit. If you’re completely broke as a newlywed but want to access a life insurance policy, this could be a decent option.

Best For…

The totally broke newlyweds…My early marriage involved lots of cheap dinners in and budgeting squeezing. I get it. But you still need life insurance–especially if your budget is squeezed because of debt! In this case, you could start off with a lower coverage amount from a company like State Farm. Or consider the raising benefit or raising deductible options from Primerica and AXA Equitable, respectively.

Those planning for children…If you know you’re going to have children someday–especially if it’s someday soon–it’s best to plan for that type of life insurance coverage. In this case, you can get a lot of bang for your buck with Haven Life. It offers some very low premiums on even larger policies. Or you could do what we did and check out an increasing benefit term life insurance product from Primerica.

The super busy…Are you still dealing with writing thank you notes for wedding gifts and settling into life together? You probably need a life insurance company with an easy online application process. In this case, Haven Life is the clear winner, but MetLife’s lower death benefit policies are a close second.

Factors to Consider

When it comes to life insurance as a newlywed, you may not have thought much about it before. After all, you’re marrying an adult who could probably take care of him or herself if something happened to you. But life insurance is a very affordable way to make sure your spouse is cared for if something unexpected happens to you.

With that in mind, here are some things to keep in mind when shopping for life insurance as a newlywed:

• Sustainable pricing: Whatever you do, don’t apply for more life insurance than you can comfortably pay for. These policies will lapse as soon as you stop paying for them. And if that happens, then everything you have paid for the policy up until this time just goes to waste. So even if you have to settle for a smaller policy than you would otherwise, don’t bite off more than you can chew.
• Layering policies: Remember that you can always add additional life insurance policies as your family grows. It’s a good idea to start off with a base level of coverage now, while you’re presumably younger and healthier. The older you get, the more life insurance will cost, automatically. But you can layer on additional small policies to get the total coverage you need.
• Ease of application: We focus a lot on how easy it is to apply for life insurance. With some of the companies above, you’ll need to meet with or call a representative. But you shouldn’t have to jump through 15 hoops to get life insurance coverage. If that’s the case, back away. There are too many good companies out there streamlining the process to deal with that mess these days.
• Customer service ratings: Look into how a company serves its customers. This can be an indicator of how quickly and efficiently they pay out claims. And if your family needs to cash in your life insurance policy, you want to be sure they can do it quickly and with minimal hassle.

Final Thoughts

Shopping for life insurance is never fun. But it’s something most everyone deals with at some point. While you’re shopping around, take the time to consider other related questions, such as secondary beneficiaries for your policies. And remember to check back in on your life insurance coverage and policies every year or two to make sure you’re completely covered.

Topics: Insurance

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