Here are a few things to consider:
1. Be honest about needs and responsibilities. You need to lay all of the facts about your finances on the table: how much you own, how much you owe, and what your current and future financial concerns are. Your insurance needs are an equally important topic to cover: discuss your financial needs and responsibilities in the event of you or your spouse suffering a debilitating illness, injury or dying prematurely. This will enable you to ensure that your needs are covered in the event of any life-changing events.
2. Coupling up, moving in and accrual of assets. At the start of your lives together, your insurance should cover income-related needs - debt, household expenses and healthcare costs. Although both of you might be working full time, your incomes may be split between covering car finance or the mortgage bond on a new house. There might even be debts, such as paying off the cost of your wedding reception or study loans. That’s why you need to consider a policy covering the loss of income, as well as considering additional cover to settle these debts with a lump-sum payment.
When insuring yourselves against this risk, you could look into various scenarios, such as cover for the period that you can “self-insure” as a couple, and if you can afford to cover the full income, or plan to reduce expenditure in the event of an illness or injury.
The need to provide for basic household expenses and healthcare costs is a life-long one. The decision whether to protect income until retirement age or death will therefore depend on how much you’ve provided for your retirement.
3. Your lives will change, so should your insurance. A young couple is likely to have many more financial obligations in the future. On average, salaried South Africans finance a new car every three years to five years, and many new parents will upgrade to a family home once children arrive. So it’s important to check that your insurance policy is flexible and able to change as your life changes.
4. Sustainable affordability. Although cheaper premiums upfront may be attractive, you need to make it that they’ve not been achieved at the expense of future sustainability. If you’re jointly repaying a mortgage bond, you might need to ensure that you have cover on both lives, because your combined debt could be called in on either partner’s death.
5. Safeguard your family’s future. If people depend on you financially, it’s important to determine which partner is primarily responsible for providing for your children and any other dependants, ensuring that you’ve made enough provision should either partner suffer a loss of income.