Marriage and Risk: How Getting Married Changes Your Insurance:
The warm feeling before or after getting married has many people in the “honeymoon phase” for a period of time but more couples should be thinking about marriage and risk: how getting married changes your insurance needs and risk.
The legal act of getting married, as opposed to just living together, dating, or engaged, can have some significant impacts on your financial situation. “For richer or poorer” and for better or for worse. Here are a couple of Insurance questions you’ll be facing after the honeymoon:
- How Marriage Affects Insurance?
- How Marriage Impacts Risk?
How Marriage Affects Insurance
Married couples can pay less as a couple than as individuals –depending on their situation. Both home and auto insurers may offer lower rates to married couples, whose historic statistics show that they behave more cautiously and file fewer claims. The key is to find the insurer that will.
Calling insurance companies may not feel like the most romantic activity for a newlywed couple, but it could free up some cash to help pay off the honeymoon. If calling isn’t your style, or you want to get ballpark about the savings before any discussions – you should use a quote comparison tool like The Zebra or PolicyGenius.
Other types of insurance that include married discounts include:
Long-Term Care Insurance:
Married couples also get big discounts on long-term care insurance, as much as 40%. That’s because spouses are likely to care for each other at home whenever possible, while a single person might not have that option.
Health Insurance & Marriage
Depending on your employer and corporate policies, post wedding is also a good time to revisit your health insurance plans.
Marriage is one of the qualifying life events that allow you to change your insurance plan, or add your spouse. Most plans require you to make these changes within 30-60 days of your walk down the aisle. If you miss that deadline, you’ll have to wait until the next open enrollment period to make changes to your plan. It’s important to discuss with your employer, HR dept., or benefits department to determine what information you will need.
If either (or both) of your employers offers health insurance benefits to spouses, do a side-by-side comparison of your plans and consider three scenarios.
- You each keep your current plan
- Your spouse joins your plan
- You join your spouse’s plan
Questions to ask:
- How will your monthly premiums change?
- And what will happen to your deductible and possible out-of-pocket costs?
- If either you or your new spouse have already met your deductible or paid significant out-of-pocket costs in your current plan year, you might not want to start a new plan with new limits, especially if you’re anticipating additional health care expenditures.
- How do the deductibles change? What is our family deductible vs. individual deductibles? Can we afford the deductible?
- Are the deductibles and out-of-pocket limits for the family plan embedded or aggregate?
- If one person in the family gets sick (or pregnant) what deductible and out-of-pocket limits must they meet before the plan starts paying?
If you don’t have employer-sponsored health insurance, you can apply for coverage on your state or federal exchange, or you can change your current coverage there in the 60 days after you get married. If you and your spouse will get coverage through an exchange, you must enroll together, although you can opt for different plans if you want.
How Marriage Impacts Your Risk
One more important financial thing that comes along when you sign the marriage license: liability and your increased risk.
If your spouse hurts someone in a car accident or a bar fight, or loses a lawsuit, libel/slander, your joint assets could be at risk. Also, if he or she racks up certain kinds of debt, creditors might be able to come after you to pay it off. As you grow older and purchase home, car, etc. These assets all carry various hazards with different probabilities of occurrence.
Your spouse could have a poorer driving history, habits, etc. this may now negatively impact you as you go to procure a family policy.
Understanding the outcome, why, and what you need to do to navigate the insurance marketplace is important for those who have increased risk transfer costs due to a spouse’s increased risk.
Also, your risk appetite’s may not align. One spouse may be willing to take more risk than another with deductibles, self insuring, business risk, etc. Don’t assume your appetites will align, it is important to discuss openly and seek insurance protection where applicable to close the gap or blend risk appetites.
Conclusion:
It’s important to understand your risk profile, the potential financial impact, your risk transfer options, how your combined hazards/risks have changed, and the difference between the two.
