How to Update Your Insurance When You Get Married
Key takeaways
Since marriage changes your financial situation and responsibilities, review your insurance policies to ensure you have the best fit for your new circumstances.
Steps like combining insurance policies and increasing deductibles can reduce costs and streamline coverage.
Keep your beneficiaries up to date on your life insurance policies—both those you pay for and those provided by your employer.
Bill Nelson is a planning excellence lead consultant at Northwestern Mutual.
When you’re about to head down the aisle, the biggest thing on your mind is probably updating your insurance beneficiaries. Yeah, right.
OK, so it’s probably the last thing on your mind. But insurance is an important part of that “for better or worse” commitment you’re about to make. And ensuring your spouse is financially protected is one of the most loving things you can do.
For all you newlyweds with combined finances, here are some must-do insurance tasks to help protect you and your new spouse:
1. Update your beneficiaries.
A beneficiary is the person or entity (like a business or trust) that gets the benefit when you’re gone. When you own a life insurance policy, for example, the beneficiary receives the money when you die.
That person may have been a sibling or parent, but it’ll likely be your spouse now. (In fact, it may be required. If you live in a community property state, you’ll need your spouse to waive the right to a life insurance payout if you want the beneficiary to be someone else.) And if you have coverage through your workplace, be sure to update your beneficiary for that policy as well.
Updating your beneficiary doesn’t apply just to life insurance. Take time to review and update your beneficiaries on policies and accounts like these:
- Life insurance, auto insurance, etc. that you purchased on your own
- Health insurance, dental insurance, life insurance, etc. provided by your job
- Workplace retirement plans (pension, 401(k), 403(b) and others)
- Flexible spending accounts (FSAs), health savings accounts (HSAs) and similar accounts
- Retirement accounts (IRA and Roth IRA)
- Savings accounts and similar financial products at your bank
You might be able to take care of the update online. It usually takes just a few minutes.
Companies typically ask for a primary beneficiary and a contingent, or “backup.” The contingent beneficiary isn’t always required, but it’s often recommended to make sure your wishes are carried out.
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2. Explore combined coverage.
When you seal the deal and sign the marriage certificate, you’re officially a couple in the eyes of the law. That means you qualify for not only individual insurance coverage but also joint policies. So it’s a good time to explore your options.
Start by looking at your coverage through work, such as your health care. In a typical year, you have only a small window of time to choose your health and other employer-sponsored insurance coverages for the following year. After that “open enrollment” passes, you’re stuck with your choices—unless you experience a qualified “life event.” Marriage is one of those milestone events.
Keep in mind that you might have only 60 days from your wedding day to choose new coverage. Otherwise, you’ll have to wait until the next open enrollment period. Be sure to take a look at each of the plans available through your jobs and consider your options.
TIP: Some married couples find it’s strategic to keep separate policies. Here are some reasons.
1. If you’ve already spent a bundle out-of-pocket for the year, then a new plan may not make sense. It’ll reset your paid deductible to zero. You may be better off waiting for the next open enrollment period.
2. You might use the insurance differently. If one spouse goes to the doctor more often and sees a few specialists, they may want a low-deductible health care plan. The other spouse, who doesn’t frequently go to the doctor, can be better off staying on a higherdeductible plan.
Some companies have different rules once you’re married. You may be able to collect “cash in lieu” of taking insurance at your employer, or you may not be eligible to take your spouse’s insurance if you’re offered insurance. Make sure you understand the rules with each of your employers when you think through the best coverage option for your new family.
Finally, look at the insurance you’ve purchased on your own—especially car insurance. If you’ve had separate plans, you’ll probably save money by going with a single policy for multiple cars. Plus, you’ll likely get additional savings since insurance companies consider people who are married less risky than singles.
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3. Look at increasing coverage amounts.
Now that you’re married, you may need more insurance. You and your spouse probably have a lot of ideas for your future. To keep those goals on track, you’ll need to make sure you have a way to pay for them if one of you is unable to work or not around.
For example, if you have a mortgage or plan to have children soon, you may want disability insurance or more life insurance. There’s a lot riding on your income. Disability insurance is designed to protect your income by replacing a portion of your paycheck if you become too sick or injured to work. It lets you and your spouse rest easy knowing that your expenses will be covered, keeping your lifestyle intact and your financial plan on track. When it comes to life insurance, be confident that you’ll leave behind an amount that allows your spouse to be comfortable while they grieve.
There are different types of policies you can add, too. Life insurance companies offer joint life insurance to cover two people, which married people and business partners can take advantage of. Some married couples find it cheaper than two comparable separate policies. It provides a death benefit payout to the surviving policyholder, which can be used to cover expenses, pay down a mortgage, pay down debt, or provide financial stability for the remaining policyholder.
To get a professional opinion on whether you have enough coverage—or the right types of coverage—contact an advisor at Northwestern Mutual. We offer a broad set of financial products, including life and disability insurance, which are designed for clients’ best interests. This complete set of financial solutions and tools can identify and address gaps to meet you where your needs are.
4. Think about the deductibles on your insurance.
If you have gone from one income to two, it’s time to give your deductibles a fresh look. These are the amounts that you pay out of pocket before the insurance coverage starts to take effect. It may make sense to up them, especially if you’ve built up savings that you could tap into.
Raising your deductibles is one of the easiest, fastest ways to decrease your insurance premiums. So be sure to review all your policy deductibles—like auto, homeowner’s or renter’s, medical and dental.
Take the next step.
Your advisor can help you grow your protection as your family grows.
Get started5. Work with an advisor to understand how your coverage impacts your financial goals.
You have so much ahead of you. Marriage is an important life change, which makes it a good time to check in with your financial advisor. Your advisor can help you think beyond your ceremony to your new life together. For the years to come, your advisor can be your trusted financial copilot.
Together you can build a comprehensive financial plan to help ensure that you and your new spouse get a jump start on your goals, whether they include a big one-year anniversary trip or having children. Maybe you can even see yourselves retiring early.
Even more, talking with your Northwestern Mutual advisor can reveal the blind spots and opportunities that often go unseen and can make sure you’re prepared, no matter where life takes you.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
