Let's face it: It's hard to buy a product that you can't see and really hope you'll never use. But unless you're wealthy enough to weather any foreseeable (and unforeseeable) financial storms, marriage is time to start shopping for insurance.
Make sure you have insurance to protect you and your spouse against the major risks your family faces:
- Dying too soon
- Getting hurt or sick
- Not being able to work because of an illness or accident
- Having an auto accident (personal injuries and damage)
- Having a visitor get hurt in your home or on your property
- Having your home damaged by a storm or other event
Each of these events can have a strong negative impact on your finances. To protect yourself, know what your risks are, familiarize yourself with insurance against those risks, and get expert help.
As a first step, learn more about the five main types of insurance.
Life Insurance
Think about the financial impact if you or your spouse or partner were to die. Could the surviving parent make do on one income? If the person had to find a job, how would he or she pay for daycare? And what about continuing to save for college or retirement? A good rule of thumb is to buy enough life insurance to equal four to five times your annual salary. Stay-at-home spouses may need their own policy to help pay for childcare in case of their death.
Health Insurance
The first year of your baby’s life will be full of visits to the pediatrician for weigh-ins, vaccinations, and the occasional prescription. Take steps now to make sure you have a comprehensive health insurance plan in place by the time baby arrives.
It’s usually not difficult to add your child to the health plan you have at work or to your personal plan. But do consider whether the plan has the services you need—such as well-baby care—at a price you can afford. Bear in mind that health plans usually charge more and may impose higher out-of-pocket costs once you add a child to the plan.
Now may be a good time to consider making changes to your coverage or selecting another type of plan. Before taking action, learn more about the features and cost differences between various types of health plans. Above all, make sure you are comfortable with what your policy will and will not cover and that it allows you to seek care from the physicians and pediatricians you prefer.
Finally, if you have no health insurance, take steps now to either buy individual health insurance or get covered under a government-mandated plan
Disability Insurance
Although life insurance is important, you’re far more likely to get injured on the job than to die. So make sure you have enough disability insurance to pay your bills and maintain your standard of living in case you can’t work. You already may have coverage at work. Long-term disability plans typically cover up to 60% of your salary. Check with your employer to see exactly what’s provided. Then look at your budget to see how much of a disability benefit you’d need to meet your monthly obligations. If there’s a gap between what your employer provides and what you need, ask about supplemental or voluntary coverages. If your employer offers no disability benefits at all, consider purchasing your own individual policy.
Automobile Insurance
Will you need to buy a new car to accommodate your larger family? If so, be sure to update your auto insurance. While you’re at it, ask your insurer or insurance agent if you’re eligible for any discounts. Once you know how much your updated auto insurance will cost, ask several other insurers for a price quote. Most people save a substantial amount by shopping around for car insurance.
Homeowners or Renters Insurance
The arrival of a new child often triggers a need for more living space. Now is the time to evaluate whether or not you need a bigger house. Remember to update your homeowners insurance or apply for a policy if you are buying a home for the first time. This may also be a good time to shop around and make sure that you are paying the best premiums for your policy.
Insurance Information Institute