By Maggie Leyes | Life Happens
While you may have already talked about joint or separate bank accounts and what gets paid by whom and when, there is probably a piece you haven’t talked about: insurance. While it isn’t top of mind for most people, talking through your insurance coverages is actually an important step. As you combine households and finances, you want to make sure that you have protection in place. Here are two questions to think about and to talk through with your partner.
Do you have any life insurance?
People may get a certain amount of life insurance coverage through work, often one or two times their salary. And while that sounds like a lot, you have to consider how long that money would need to last. For example, are you buying a home together? If so, would just one of you be able to continue with the mortgage if the other died unexpectedly, or would you be forced to sell it just so you could meet day-to-day living expenses? Plus, you also have to consider that life insurance coverage through work typically ends when your job does. So if you change jobs, you may find yourself without coverage, and you new job may or may not offer life insurance as a benefit. The easy solution is to get your own individual life insurance policy. And for most people, it can be quite affordable. Remember, the younger and healthier you are, the less expensive coverage is.
Do you have disability insurance?
If you are working and rely on your paycheck (and how many of us can say we don’t!), this is a key piece of coverage. Disability insurance pays you a portion of your salary if you were to become sick or disabled and unable to go to work and earn your paycheck. An individual disability insurance policy has a key benefit: It will be with you as you move from job to job. Many people think Workers’ Comp would take care of them if something happened, but you only get this coverage if the accident is work-related. Most disability claims—more than 90%—are due to illnesses, like cancer, for example. That means if you couldn’t work, you’d have no income. What is your plan to pay your monthly costs if something like this happened? That’s where disability insurance comes in. It would replace a portion of your salary so you could continue to pay your mortgage or rent and your monthly bills until you are able to return to work. Your employer may offer this coverage through work, so be sure to talk to your HR rep or benefits administrator to see if you have disability insurance (short-term, long-term or both) and what it covers and for how long. You can also get an individual disability insurance policy, which has a key benefit: It will be with you as you move from job to job. In a tight economy, employers are always looking for ways to trim costs and unfortunately insurance coverage is often first on the chopping block. When you have your own policy, you never have to worry about if your next job will have coverage.
Once you have talked with your partner, if you find either of you has gaps in coverage you’d like to fill, then it makes sense to sit down with an insurance agent. Remember, they will talk through your options at no cost to you—and no pressure to buy.
Wishing you all the best as you start your journey together!
