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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