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Financial Advice for the Newly Married in Katy TX

Wedding bells ring in the need to revamp the insurance coverage you were carrying when you were single.  For example, it may be less expensive for both of you to insure under a single employer’s medical plan.  You’ll probably also want to insure your vehicles with a single carrier.  If one of you quits working, you might want to drop that person’s disability coverage unless they anticipate returning to work within a couple of years.

Life – Now life insurance is more important because someone else is financially tied to you.

Calculate first the amount of coverage you need to repay large debts and replace future lost income. Then decide what type of insurance to buy. You might be able to afford to buy sufficient death benefits through a whole life, universal life or variable universal life policy, all of which have investment components as well as death benefits. Or, you may be better off buying term life insurance, which provides only a “pure” death benefit for a death occurring within a specified time. Generally, term insurance allows you to buy more death benefits for each premium dollar.

Your employer may offer some life insurance coverage, but keep in mind that when you leave the job, you lose the coverage.  Buying your own life insurance puts you in control of your protection.

Homeowner’s – You may become a first-time homebuyer. If so, it’s best (though more expensive) to buy a policy that will pay for the full cost of rebuilding your home and for replacing your personal possessions, versus merely paying for their market value at the time. Standard policies typically set limits on what they’ll pay for higher-end possessions such as jewelry, silverware and antiques, so you may need a “rider” or “floater” to provide extra coverage.  Choosing a higher deductible and putting smoke alarms and security systems in your house can lower premium costs.

And be aware that the standard homeowner’s policy does not cover flood or earthquake damage.  You’ll have to buy separate policies to protect against these events.

Liability – Commonly called umbrella coverage, this provides liability protection above the limited protection offered by standard homeowner’s and auto insurance.  In this era of lawsuits, liability coverage becomes more important as your net worth grows.  Umbrella coverage costs only a few hundred dollars a year for a typical $1 million policy, especially if bought from the company that insures your car or home.  Ask if you can receive a discount by purchasing your auto, homeowner’s and liability insurance through a single carrier.

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