Newlyweds: Say “I do” to life insurance

4 minutes
Un couple de mariés dansent ensemble

Planning a wedding? Congratulations!

Amidst the guest list and finding the perfect DJ, don’t overlook an important step—choosing life insurance to secure your future together. We agree, it’s not very glamorous or romantic... However, this step plays a key role in your future together. Let’s dive into it briefly here.

Life insurance at a glance

It’s a contract under which an insurer agrees to pay an amount to someone–the beneficiary–on the death of the insured person.

We're doing fine, so why take out life insurance?

You and your partner are planning for the future, maybe even matching your slipper colours? (Fine by us, no judgement here!) Now, while everything is going smoothly, it’s the perfect time to protect yourself from the unexpected.

The death of one could put a strain on the surviving spouse’s finances. This is where life insurance comes in to safeguard you against this loss of security.

The purpose of life insurance depends first and foremost on your needs:

  • Replace an income so that the surviving spouse can maintain their standard of living.
  • Cover funeral costs and ease the burden of immediate expenses.
  • Settle inheritance costs without impacting your family assets (your estate).
  • Pay off the deceased's debts (e.g. car payment instalments).

Life insurance can also be used for other purposes such as leaving an inheritance to loved ones or to pay taxes on death.

Which type of life insurance to choose?

There are 2 main categories of life insurance.

As the name implies, term life insurance offers protection for a limited period of time. Depending on the contract, it can be renewed every 10 to 35 years.

This simple and affordable protection is useful if an unfortunate event prevents you from fulfilling financial obligations, such as paying off a mortgage. Good to know–It can also be combined with permanent life insurance.  It offers lifelong coverage with a fixed cost, providing financial benefits to your loved ones regardless of the age at which death occurs.

Here’s an example

Juliette and Nora who recently tied the knot have just bought household appliances on credit. When budgeting, they realize that both their incomes are needed to pay off their condo mortgage, condo fees and other monthly payments. The sudden death of one of them would force the other to sell the condo quickly.

To secure their future, they book a meeting with a financial advisor. After reviewing their current situation, the financial advisor suggests that they take out term life insurance. As Juliette and Nora's debts will decrease over time, their savings are likely to grow. They will have the flexibility to adjust their insurance as their needs evolve.

How much should Juliette and Nora set aside?

The amount can vary greatly from one person to another. Generally, we recommend protecting between 60% and 80% of family income.

By factoring in the survivor’s salary, we can determine the annual loss of income. Then we multiply by the number of years you want to protect at the same standard of living.

It’s also important to consider all the assets that will be passed on such as RRSPs, investments, pension plans, life insurance from work... These assets can help you reduce the amount of insurance needed.

Ideally, you should consult a specialist for an accurate assessment of your specific needs. Our financial security advisors have the expertise to provide you with a personalized projection.

Our specialists’ insights

According to our advisors, many people forget to include their retirement savings when planning for their future expenses after the death of a spouse.

To strengthen long-term financial security, we at Beneva recommend that this expense be considered a priority.

Is life insurance mandatory even without children?

No, life insurance is not an obligation. But this financial tool often becomes essential to protect a couple, whether or not they have children.

Regardless of your family plans, it's best to have a basic life insurance policy as early as possible, when you’re young and healthy. This way, you can lock in lower rates. As you age, your life insurance premiums will increase, much like the number of candles on your birthday cake. If your health deteriorates later on, you may find it difficult to get coverage, or if you do, you’ll pay higher premiums.

Baby boom on the horizon!

Dreaming of a having a big family? Plan to increase your insurance coverage with each new child to make sure your growing family is covered.

What else should you know?

While you're making decisions for your wedding (like choosing between white chocolate or tropical fruit for the cake), keep in mind that:

  • The life insurance benefit is not taxable. 
  • You are free to choose the beneficiary.
  • In your life insurance policy, you can name someone who doesn't yet exist... like a future child. 
  • With a revocable designation (that can be cancelled), you have the flexibility to change the beneficiary or beneficiaries of your life insurance policy. For an irrevocable beneficiary, however, you must first obtain their consent before making any changes.
  • If no beneficiary is specified in the policy, the death benefit will go to the policyholder or their heirs after the insured person’s death.

A lifelong commitment (and beyond)

What if a health problem later prevents you from getting coverage? Taking out life insurance now means saying "I do" to a well-protected future, for two or with your future children. Life insurance is one of the essential things to consider when you're getting married.

Combine that with a carefully planned estate, and you’ll make sure that no one inherits any financial burdens.

To fine-tune your strategy, start by booking a free consultation with our financial advisors. They'll assess your situation and help you choose the coverage that's right for your plans.

Now, with life insurance checked off your list, you're even more ready to say “I do” with confidence... We wish you a lifetime of happiness!

Contact our advisors

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