Life insurance is designed to prevent a financial burden on your loved ones if you pass away. For that reason, it's a common purchase for spouses. However, just because you aren't married doesn't mean you don't need that added layer of financial protection. Below, take a closer look at why it's such a valuable decision.
Why Unmarried Couples Need Life Insurance
Once you share assets, there's potential for financial risk in the event of a death. For instance, if you buy a house together, and then they pass away, the mortgage legally becomes your responsibility even though their income is gone. A life insurance policy would allow you to cover the expenses on your own.
It's important to also consider dependency. If you have children together, then you want to make sure that either of you can provide for them financially after the loss of one income. Alternatively, if your partner and dependents currently rely on your finances, a policy could help them maintain the same lifestyle after you're gone or vice-versa.
Additionally, purchasing a policy now can save you both money in the long run. Typically, life insurance plans only increase in price with age, so you can enjoy lower rates by buying one sooner.
The easiest method involves each person buying a policy on themselves and naming the other partner as their beneficiary. This process offers the least amount of work and restrictions as beneficiaries can be anyone. Some plans also allow you to add a person onto your individual policy.
Alternatively, you can both purchase a policy on the other with their permission. As a policy owner, you both stay in control of the beneficiary on your individual plans. For that reason, it's useful if you break up but still have legal financial ties.
For instance, if they become deceased after you separate but you're the co-signer on their auto loan, you take on the payments. You can use the insurance payout to cover these costs.
There are also joint policies available. They're usually reserved for married couples, but some companies accept unmarried couples in certain circumstances. These plans offer two sets of payouts—one for each passing partner.
Different Couple Categories
Insurance companies categorize couples based on certain factors, which impact the types of policies available and possibly the rate. If you're engaged, you can expect to have many—if not all—of the same options as married couples. If you're not planning on getting married, then you're required to prove there's a shared financial interest, such as co-ownership, to take out policies on each other or apply for a joint one. The same rule applies to couples not living together.
Find the right life insurance policy for you and your partner today at Hummel Insurance Services in Oakland, IA. The local insurance agents are committed to providing a personalized shopping experience. Learn more about your policy options in the Pottawatomie County area today by requesting an insurance quote online or at (712) 482-6424.