Getting married is an occasion for joy and celebration, and for those among us lucky enough to enjoy good health, illness and death are subjects that are unlikely to crop up very often. Yet the first years of married life are also likely to be a period of increasing responsibility, from taking out a mortgage to starting a family, your financial obligations can quickly mount, so protecting your loved ones in the event of the unexpected could become more important than ever.
Life is full of surprises. Would your mortgage repayments be covered if you, your partner or both of you lost your job? If one of you were to fall ill or pass away unexpectedly would your partner be able to cope financially? Will your children be protected financially if you weren’t around anymore? It might be an issue that no one really wants to think about, especially not in those first years of wedded bliss, but with a future impossible to predict, and if times do get tough the last thing you want to have to worry about is your finances.
Taking certain steps such as building up a savings buffer or taking out certain types of insurance can give you peace of mind that your family are protected financially whatever lies beyond the horizon.
Now that you’re married what safety measures can you put in place to secure your future?
Save for a rainy day – You should consider setting aside the equivalent to at the very least three months in wages to cover the cost of living should you lose your income. In a tough economic climate few of us will enjoy 100% job security so having a back fund is essential especially if you have regular large outgoings such as mortgage repayments to contend with. The bigger the buffer the more secure you are likely to be.
Making a will – It might seem unnecessary, but making a will becomes especially important once you start building up assets (e.g. buying a property), or thinking about kids. If something should happen to you or your partner having a will in place will help make things easier when you need it most.
Insurance options include:
Life insurance – In return for a premium a life insurance policy will pay out to a partner or dependent in the event that you should pass away. There are a number of different types of life insurance policies available, including joint life insurance, which can prove to be a more cost effective option for a married couple. A lump sum could help your other half get back on their feet.
Mortgage payment protection insurance – Many newlyweds may be anxious to get a foot on the property ladder, and buying a new home is an exciting step, but have you thought about what would happen if either of you were to lose your income? Mortgage payment protection insurance will pay out to cover your mortgage repayment if you should fall ill or become unemployed.
Income protection insurance – This type of insurance will payout if you should lose your job through no fault of you own due to illness or accident. Many policies will often pay up to the equivalent of 50% of normal salary, which could prove a welcome bonus in times of need.
Of course each of these insurance options will not be suitable for everyone, and finding the right kind of insurance will depend on your own circumstances, needs and budget. There are a number of options available, and if you’re at all confused you may want to consider speaking to an independent financial adviser. If you do decide that insurance is the right option for you and you spouse, make sure you read the small print of any policy you are considering so that you know exactly what you can expect and when.
Planning and saving for a rainy day could be one of the most important steps that you take to ensure a secure financial base for a long and happy married life.
This post was written by John Hughes who is the resident blogger at independentfinancialadvisor.co.uk , a site that provides access to independent financial advice as well as to debt advice charities for those struggling with their debts.