Are you recently married, or plan to in the near future? Start your marriage off right with these tips.
I have had quite a few clients get married for either the first or second time in the past couple years, which is not only super exciting for them and for me as their financial planner as household’s blend, but also means we have a few important action items to help preserve their financial well-being. Once you’ve combined your lives, you may be liable for any claims against your spouse and it’s important to make sure your insurance coverage is sufficient to protect you as a family.
If you’ve recently married or re-married, take a look at a few steps below that are often missed and truly important to take once you start your new life together. Not only can they make sure you and your loved ones are protected best, but they can save you money.
LIFE INSURANCE
We are fans of term life insurance for clients with children, non-working, or low earning spouses. Term is reasonably priced and serves purely as a risk management tool. You may have a policy through your employer, or a private policy. You’ll want to double-check the beneficiary to make sure you’ve added your new spouse to the policy. For folks getting married a second time you’ll want to make sure to take your ex off the policy as your beneficiary (unless there is a reason for them to be designated). This is something we have run across many times and it just take a few minutes to update your beneficiary on line in many cases.
Term life insurance is less expensive for young, healthy people so there is a benefit in getting it at a young age. We typically suggest clients get policies that extend a few years past their youngest child’s graduation from college. We consider this an especially important tool for clients with non-working or low earning spouses and clients with children.
HOMEOWNERS INSURANCE
If you are now combining two households into one see if you can either update an existing homeowner’s policy or if you need a new one. This is also a good time to review the policy coverage to make sure its adequate. Insurance brokers in your area will know the average price per square foot to build a home, so can back in to this cost to make sure you have enough insurance. Make sure, too, that you have replacement cost coverage in the event of a claim. When we review client policies we’ve come across clients with not only insufficient coverage, but folks who are over insured. You’ll want to make sure your coverage is right for your situation.
Between wedding gifts and jewelry, you may have new property you want to make sure is insured in case of loss. To insure your wedding ring and other valuables you’ll likely need a personal property rider to your policy. Don’t assume that because you have homeowners or renter’s insurance that your jewelry is covered! In many cases there is a very low limit on what an insurance company will cover on personal property that is not specifically covered by endorsement. You may need an appraisal for the property. Depending on what you need to insure, there may be insurance specialists who provide coverage for your particular type of property, such as jewelry or fine art.
UMBRELLA INSURANCE
This is one type of insurance we usually have to remind our clients to get. Having auto or homeowner’s insurance is critical, but it doesn’t always provide enough coverage. An umbrella insurance policy steps in after other policies you have are exhausted in the case of a claim. This is essentially insurance for catastrophic loss, but these losses can be more common than you’d expect. We usually suggest a policy close to the amount of a client’s net worth.
Umbrella policies come in $1million increments and most insurers will require that you maintain specific levels of liability coverage on your homeowners and auto policies. Make sure to check with the insurance company issuing the umbrella policy exactly what liability levels are required for both auto and homeowner’s policies. You’ll find Umbrella insurance to be relatively inexpensive, too.
AUTO INSURANCE
Getting married is a good time to make sure your auto coverage is not only adequate, but your deductibles are in line. Old clunker cars may not justify a low deductible/high collision policy, for example, so you’ll want to revisit your policies to make sure your coverage is just what it should be from liability coverage to deductibles. We do suggest you speak to your insurance broker about uninsured motorist coverage, which we’ve found is often overlooked. In the state of California nearly one in four drivers is uninsured, which can be a challenge in the event of an accident if you don’t have uninsured motorist coverage. Some states require uninsured motorist coverage, but most do not.
For help finding the best policies for you, we suggest contacting an insurance broker, rather than an agent. A broker will work with many different insurance companies and can compare quotes and coverage for you, so you can make a more informed decision choosing the best policy. An agent will work specifically for one insurance company, which may or may not be the best policy for your needs.
KEY STEPS TO TAKE
1. Review your insurance needs for life insurance, auto, homeowners, and umbrella insurance
2. Look into bundling your policies for multipolicy cost savings
3. Make sure your beneficiaries are current on all policies
And make sure to revisit these policies as life changes. Over time as you add children, new cars, new homes, and other changes to the mix, make sure your insurance covers you and your new household.
And if you’d like to learn more about how we at WealthChoice help professional women manage risk as they go through life, contact us!
