Insurance Issues That Concern
Married Couples
What is it?
If you are married or planning to marry, you
should determine how marriage impacts your insurance needs. The lack of proper
insurance protection can lead a married couple into financial ruin. If you
already have disability or life insurance policies, determine whether your
existing coverage is adequate and update your list of beneficiaries. If you do
not have either a disability or life insurance policy, consider whether or not
your marital status changes your need for insurance. You should also review any
existing policies held by you and your spouse (or spouse-to-be) and consider
pooling them with one company or having multiple policies with one company in
order to receive discounts and lower policy rates.
Tip: If your employer does not offer a particular type of insurance or
if the amount of insurance offered is not adequate, consider purchasing an
individual or private policy.
Health insurance
Because of the high cost of medical treatment,
a poorly timed sickness or accident could be financially devastating to your
family. To avoid a financial disaster during a medical crisis, you and your
family should have health insurance.
Life insurance
In general
While you might not have felt the need for
life insurance protection when you were single, it becomes important when you
marry. Once married, you may find yourself with a spouse and/or children who
are financially dependent on you. If you do not have life insurance, you will
want to have a policy in place in order to make sure that your family's
financial needs will be taken care of when you die. If you already have a life
insurance policy, you should reevaluate the adequacy of your existing coverage.
How much life
insurance do you need?
You should have enough life insurance to
enable your family to continue the lifestyle they were accustomed to before
your death. If you have children, you may want to make sure that your
children's college education bills will be paid. At the very least, you will
want to ensure that your family will be able to pay for burial expenses and pay
off any of your debts. You can purchase the amount of protection that you need
from either a term or cash-value policy. While both policies provide your
beneficiaries with benefits at your death, they contain important differences.
Term insurance provides you with pure death-benefit protection. In other words,
if you die while the policy is in effect, the insurance company pays your
beneficiary, and the policy does not build any cash value. Since term insurance
is low cost, based on age, it is an attractive form of life insurance when you
are younger and have minimal cash flow.
Although low-cost term insurance may have
provided you with sufficient life insurance protection in the past, it does not
provide you with the same type of benefits that come with the more costly cash
value insurance. Cash value insurance provides you with protection besides
serving as a savings vehicle. Although it is more expensive than term insurance,
cash value insurance can be a useful financial tool for a married couple since
it builds up cash value over time. The cash value can then help you fund
long-term goals, such as buying a house, funding a child's college education,
or providing you with savings for retirement.
Tip: When you reevaluate the adequacy of your existing coverage, you
should keep in mind whether or not you and your spouse intend to start a family
in the near future.
Tip: In addition to making sure you have adequate life insurance
protection, you should examine the beneficiary designations on your current
policies, and make sure that they are up to date.
Disability insurance
In general
While life insurance ensures that your family
is financially provided for at your death, disability insurance provides your
family with income if you are unable to work as a result of a serious illness
or injury. Disability insurance is a necessity if you have a family that
depends on you for financial support. Although disability coverage can be
expensive, depending on your age and the type of work that you do, it allows
you to insure your most valuable asset: the ability to earn an income.
Tip: You should consider disability insurance even if your household
has two wage earners since most dual-income families have expenses that rely on
both incomes.
How much
disability insurance do you need?
Generally, you should have enough disability
coverage to ensure that you could continue to maintain your current lifestyle
if you became sick or injured and could not work for a lengthy period of time.
While most insurance companies won't insure you for your entire salary amount,
you should look for a policy that provides benefits that replace at least 60
percent of your income. Benefits are received free of income tax for a policy
that is paid for by the insured with after tax dollars.
Other types of insurance
Automobile
insurance
Chances are that both you and your spouse own
separate cars. If you each also have separate auto insurance carriers, you may
want to pool your auto insurance with one company. Many insurance companies
will give you a discount if you insure more than one car with them.
Homeowners/renters
insurance
Whether you and your spouse own or rent a
home, you need insurance to protect yourself against either the loss of your
property or claims against you if someone injures him/herself on your property.
If you already own a home, you may need to add your spouse's name to the
policy. Consider having the same insurance company provide coverage for your
home or apartment and your car. Many insurers will give you a discount if you
carry more than one type of policy with their company.
CornerStone Financial
Whether your
nest-egg is worth millions or thousands,
You and your
family deserve it more than the government....
We are here to help you with all of your
financial and insurance needs. Our skilled professionals are licensed with
over 100 top name companies and can help you gain a better understanding of the
concepts behind insurance including investing, retirement and estate
planning. There are literally thousands of products to choose from,
but we can help pinpoint what is best for you and your situation. Please
do not hesitate to contact us if you have questions.
Contact:
Eric Tuttobene
President/CEO
CornerStone
Financial
(615) 427-8780
IMPORTANT DISCLOSURES
The
information presented here is not specific to any individual's personal
circumstances.
To the extent
that this material concerns tax matters, it is not intended or written to be
used, and cannot be used, by a taxpayer for the purpose of avoiding penalties
that may be imposed by law. Each taxpayer should seek independent advice from a
tax professional based on his or her individual circumstances.
These
materials are provided for general information and educational purposes based
upon publicly available information from sources believed to be reliable—we
cannot assure the accuracy or completeness of these materials. The information
in these materials may change at any time and without notice.
