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Consider gift of life insurance for the newlyweds in your life

by Maurice Draine | Contributor
September 1, 2020

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Many people wouldn’t consider giving a new couple insurance as a wedding present. However, purchasing life insurance for the newlyweds in your life is one way to provide a practical and thoughtful gift on their special day. Newlyweds have started to trend toward preferring more experiential gifts to celebrate their union (like receiving money for a big trip) than material possessions; giving life insurance allows them to keep their bags light and their future a little more financially secure.

Parents in particular may be looking for a unique way to send their child and their spouses off into their marriage. For instance, parents could gift $10,000 to the newlyweds to put toward a life insurance policy or policies of their choosing. This initial money could not only provide the newlyweds with a financial safety net, but also allow them to explore their life insurance options and begin seeing returns on that investment quicker. If they choose to purchase a whole or universal life insurance policy, the parents’ initial gift could eventually lead to a down payment on a house, putting a kid through school or securing additional retirement income.

Life insurance isn’t something many younger people think about investing in, but it can be the most beneficial to start young newlyweds off for various reasons. In addition to providing a death benefit, life insurance offers other flexible financing options to meet the couple at every stage of their life. Whether for one or both spouses, a life insurance policy is more than just another gift. The beneficial, long-term impact of a life insurance policy can be so much more than either newlywed ever imagined.

Should I buy life insurance for the newlyweds?

Life insurance has many benefits and can be one way that a couple starts off their new life together. Many young people don’t consider buying life insurance because they are young, in good health and don’t think they need this kind of insurance policy yet. Life insurance is about protecting your loved ones if the unthinkable happens, and it’s never too early to have this peace of mind.

Let’s say the newlyweds are in their early 20s. A life insurance policy doesn’t just give them income security in case of premature death; it also is more affordable the younger they are when they start paying premiums. Lower premiums mean they can invest that money in other ways to benefit them. A life insurance policy may be something neither of them had thought to purchase for themselves.

Although they may not be thinking about it yet, the day might come when the couple decides to start a family. A life insurance policy not only pays out a financial benefit to a beneficiary, but can also be used for financial assistance for dependents. A life insurance policy can keep your spouse financially secure if something happens to you and provide for children that may come into the picture throughout your life together.

What are the benefits of life insurance?

There are many benefits that come with purchasing a life insurance policy while you’re young. First, it’s important to consider whether you want term or whole life insurance.

Term life insurance is a life insurance policy that lasts between 1-30 years. If the policyholder were to pass away during the agreed upon term of their policy, their benefits would be paid out to their beneficiary. Term life insurance is popular because it tends to cost less than whole life insurance. Term life doesn’t offer cash value benefits and does need to be renewed every time the term ends.

Whole life insurance, or permanent life insurance, is an insurance policy that is more expensive than a term policy but doesn’t have to be renewed. Whole life insurance is beneficial for people looking to accrue financial value as they age. With a whole life insurance policy, part of the premium you pay every month is put into a tax-deferred savings account that grows at an agreed-upon rate. As your premium rate increases, so does your savings.

This money is known as the “cash value” of the whole life insurance policy, and it can be used by the policyholder in a variety of ways. The policyholder could use this money to:

  • Take out a loan
  • Borrow for retirement
  • Create financial flexibility
  • Pay the monthly policy premiums

This money becomes an extra savings account the newlyweds could use to better prepare for a stable financial future. They are looking ahead to the near future as well as considering their financial health when they are 45, 65 and older. The amount of money that is put aside for that cash value account depends on the individual policy you purchase, as does the interest rate that applies to that money.

In addition to the money paid out to the policy’s beneficiaries in case of death, whole life insurance has the additional benefits:

  • Tax-deferred savings
  • Growing cash value
  • Income security
  • Low premiums
  • Retirement benefits
  • Long-term care funding

Life insurance gives a couple a substantial head start on their financial health and their plans. The cash value accumulated from their life insurance policy could be used to even pay the policy premiums, help pay for a child to go to school or eventually be used as retirement income. This financial flexibility can help many newlyweds navigate the road ahead of them.

Why should I buy life insurance now?

Considering life insurance is reasonable at any stage of life. A life insurance policy isn’t only useful in case of death; a whole life policy can accrue cash value and offer tax-deferred savings. Newlyweds can choose to increase their death benefits as the years go on or decide to purchase a different life insurance plan that meets their needs. The manner in which they choose to use their life insurance policy, all started with one thoughtful gift from you to them on their wedding day.

Typically, if you purchase life insurance when you are young and in good health, your premium payments can be very low. This aspect of life insurance for the newlyweds can be very appealing, as cost savings are significant when you’re just starting a life together. Life insurance isn’t a requirement, but it is helpful to have alongside renters or homeowners insurance and an auto insurance policy. These necessary insurance policies can help you financially recover from unexpected events in every area of your life.

What can life insurance money be used for?

There are many reasons why parents, grandparents or other close relatives should consider giving the gift of life insurance to the newlyweds you know. While they may not see the point of another insurance policy, they’ll soon realize how useful this insurance policy can be in a multitude of ways.

Premium payments for a life insurance policy will rise throughout the policyholders’ lives, but so will the married couple’s career earnings and the benefits of a life insurance policy. In addition to cash value accrual, a life insurance policy can also include long-term care considerations later in life. This allows you to plan for the future, even if you don’t know exactly what will happen.

Policy loans and withdrawals can be taken out of your life insurance policy to give you a little more money to work with on certain occasions. You can also set up funds to be passed onto heirs from this policy.

Alliance America can help

Alliance America is an insurance and financial services company. Our financial professionals can assist you in maximizing your retirement resources and achieving your future goals. We have access to an array of products and services, all focused on helping you enjoy the retirement lifestyle you want and deserve. You can request a no-cost, no-obligation consultation by calling (833) 219-6884 today.

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