If you have finally decided to get married, it is important for you to buy life insurance. Read ahead and know more.
Getting married is an important decision that couples take for their lifetime. It brings in stability as both partners are equally dependent on each other. Apart from this, marriage in most cases, is a lifelong commitment!
One of the biggest strains in a wedding is the financial debt. Lack of awareness among young couples is the reason why they do not buy life insurance after marriage. However, buying life insurance after marriage is a must. Disasters and emergencies do not come with prior warning. If something happens to either of the spouses, adequate life cover is the only option which can protect you from emotional and financial risk.
In order to strengthen the fact of buying life insurance after marriage, let us throw some light upon the importance of life insurance for married couples.
Increase in Expenses - Once you are married, there is a sudden increase in expenses due to increased responsibilities. You cannot live like a single person anymore. The expenses might increase further in case you decide to have children. Therefore, any loss of income will lead to a debt ridden life. This is where a life insurance policy comes into play. A life insurance policy will help you replace the income arising out of a loss. Also, buying life insurance after marriage provides comprehensive financial protection for you and the entire family.
Loan/Debt Repayment - Most people get married in their late 20s and early 30s. At this age, couples usually end up taking a loan for buying a car or home as co-applicants. In case of sudden death of either of the spouses, the entire loan repayment obligation will fall on the surviving spouse. This can put a lot of pressure and there might be a chance where the house will have to be given away. A life insurance policy can help provide cover against such a disastrous situation.
What is the right age? - There is no such age restriction or limit on buying life insurance post marriage. It is ideal to buy a life insurance policy when you are young or immediately after marriage. Buying life insurance at an earlier age will ensure that your entire family is covered at affordable premium rates. Being young, you and your spouse are less susceptible to diseases in comparison to an elder couple. This, in turn, allows insurers to provide better protection plans to couples. Lower premiums are easily affordable and help in reducing expenses.
What are the various life insurance plans available for married couples?
Term Plans - Term plans are also known as protection plans. A term plan provides financial support to the beneficiary/dependent/nominee in case something happens to the policyholder within the policy term. Term plans can be taken on a joint applicant basis. Another ideal situation is for both the partners to purchase independent policies and enlist each other under the policy cover. Term plans are also one of the cheapest life insurance plans in the market. They come with lowest premiums but provide a huge cover. A term plan is an excellent choice for a recently married couple. The only drawback of a term plan is that it does not come with a maturity/survival benefit.
Traditional Insurance Plans - A traditional insurance plan or whole life insurance plans are also good options for married couples. Apart from providing life cover, a traditional life insurance plan also helps accumulate huge savings over the policy term. The savings options make it ideal for achieving short and long term goals. Many insurers allow the facility of taking a loan against the policy. The premium rates are higher compared to term plans. Traditional and endowment plans also come with guaranteed benefits, which is beneficial for the entire family.
When purchasing a policy, there are many factors that need to be taken into consideration such as current expenses and liabilities, outstanding loans and debts, rate of inflation, future expenses (child education), number of dependents, etc. One of the most important factors is that of a nominee. It is important to keep the nominee in loop about the life insurance purchase and as well as the claim process.
Importance of having a Nominee in Life insurance
A nominee is a person (usually immediate relatives) who is bound to receive any benefits arising out of the policy in case something happens to the policyholder. This means that, if the policyholder has mentioned their spouse, parents or children as designated nominees, they will become the beneficial owners of the claim benefits. It is not mandatory to mention a nominee but the very purpose of purchasing a life insurance plan is to provide for your family in case of your untimely demise. Hence, mentioning a nominee in a life insurance policy is very important. In case of death of the policyholder, a mentioned nominee prevents any legal disputes and facilitates quicker claim settlement. You can mention a nominee any time during the policy tenure.
A nominee is generally someone who is close to the policyholder. When registering a nominee, you are required to submit details and proof of relationship to the insurance company. If the nominee is a child, you will have to appoint a guardian/custodian to whom the claim benefits will be given.
You can also place successive nominations where the claim benefits are paid in a successive manner. Example, if the nominees are A & B, then the claim benefit will be given to A, in case of A’s death, the insurer will approach B. The order of succession is usually mentioned by the policyholder. Another option is that of multiple nominees where the amount is distributed equally. This is a suitable option in case you have many dependents.
If the nominee passes away (in case of parents), you will have to register another nominee. The facility to modify an existing nominee is provided by all insurance companies. You can make multiple nominations over the policy tenure by simply filling the ‘last valid nomination form’.
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