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Selecting whole life insurance when you're newly married

Whole life is an insurance policy that provides lifetime insurance protection with significant guarantees and tax benefits for the policy owner. Permanent life insurance provides a lifetime of protection and accrues cash value and thus offers a lifetime tax efficient savings component.


Do

Do acquire sufficient coverage

Acquire sufficient coverage to protect your human life value. When newly married you want to make sure that you have all the protection you can get. An insurance company will not allow you to over-insure your worth. They do this by offering coverage based on your age and a multiple of your income. Whole life acquired young will be less expensive than at any other time in your life.

Do consider all of your beneficiaries

Although you have just married the love of your life, don’t forget that you may want to provide funds if you should die, to parents and/or siblings as well. Additionally, if there are children, be sure to coordinate designations with a will and/or trust for their benefit.

Do buy coverage from a mutual insurance company

There are two types of companies: Stock and mutual. Stock companies have a duty to provide return first to stock holders, therefore, policy holders do not achieve high rates of return. Mutual companies are owned by policy holders and all profit is distributed back to policy holders in the form of dividends that enhance return.

Do work with a qualified agent

Make sure the person you are working with has sufficient experience and knowledge to guide you in the selection of the coverage you want to acquire. Make sure they understand the significance that the insurance coverage represents in your overall plan and coordinate with an attorney on beneficiary designations if necessary.

Do recognize riders that can be added

Waiver of premium benefit pays premiums on your behalf if you become disabled while the policy is in force. This continues the growth of value for you and your beneficiaries. Guaranteed insurability allows for the purchase of additional coverage in the future without proof of current good health. Accelerated benefit riders can pay pre-funded death benefits to the insured while alive in cases of a terminal illness or nursing home needs. Note: Riders may incur an additional cost or premium and rider benefits may not be available in all states.


Don't

Do not buy your insurance online

Whole life insurance is a complex asset that you need professional assistance to structure properly. Buying in person can help eliminate any blind spots you may have before making your decision. 

Do not buy whole life as a short-term insurance solution

Whole life is a long-term asset protection decision. Surrendering a policy in under 10 years of ownership will most likely result in a financial loss.

Do not mess up your beneficiary designations

An insurance company will not pay policy proceeds to a minor. Additionally, your estate should never be named as beneficiary. This would expose the proceeds to probate fees and more importantly to creditors. Never list spouse or children as a group of beneficiaries. Make sure you name them individually otherwise anyone could contest the claim as a child.

Do not leave the beneficiary of your policy unchanged

Many newly married couples are not necessarily first married couples. Leaving a prior spouse as the beneficiary of an insurance policy could result in unwanted proceeds paid and heartache to the new spouse and family.

Do not go it alone

Be sure that you work with a professional when you are looking for life insurance. This is a complex asset and the internet and/or calling insurance companies to acquire the policy can cost you more than you think you may save.


Summary
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Whole life insurance can be the heart of a strong, full financial plan. Bought properly and structured appropriately, it can serve both the insured and their beneficiaries safely throughout their lifetime.


More expert advice about Life Insurance

Disclaimer:
Leonard P. Raskin, Registered Representative and Financial Advisor of Park Avenue Securities, LLC (PAS), 954 Ridgebrook Road, Suite 300, Sparks, MD 21152. Securities products/services and advisory services are offered through PAS, a registered broker-dealer and investment advisor, (410)828-5400. Field Representative, The Guardian Life Insurance Company of America (Guardian), New York, New York. PAS is an indirect, wholly-owned subsidiary of Guardian. Raskin Global is not an affiliate or subsidiary of PAS or Guardian. PAS is a member of FINRA, SIPC. 2016-32548 Exp 12/18

Photo Credits: _DSC7438 © Sergio Vassio by Flickr; Check Man, Cross Man and Jump Man © ioannis kounadeas - Fotolia.com

Leonard P. Raskin, MSFS, CFP, ChFC, CLU, CAP, CASL, AEPPresident & CEO, Raskin Global

Helping people design Smart Strategies for their Whole Life is the mission of Raskin Global. The core principle of his practice – to provide people with economically sound strategic financial advice; to serve as the advocate of their financial ...

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