COLUMBUS – Engagement season is officially here, with couples around the country planning to join in matrimony. Trend watchers say 39 percent of marriage proposals happen between Thanksgiving and Valentine’s Day.
But according to a recent survey by the National Association of Insurance Commissioners (NAIC), in which the Ohio Department of Insurance is a member, for couples embarking on the journey to combine their financial lives, the real adventure often begins after the honeymoon is over. In fact, the survey cites notable discrepancies between what couples know they should talk about before tying the knot, and what they actually discuss.
“This survey captures a sentiment we often encounter — consumers want insurance education, but often don’t know where to begin,” Ohio Lieutenant Governor and Insurance Director Mary Taylor said. “These new resources provide an advantage for couples interested in addressing these important decisions together.”
Sensitive Insurance Topics Ignored
The NAIC survey found that before the wedding, many couples had not fully explored topics that affect insurability. For example, while 71 percent of newly married couples acknowledged the importance of sharing beneficiary designations before marrying, nearly half never got around to addressing their life insurance needs before saying “I do.”
To help couples get smart about insurance together without tearing each other apart, the NAIC created the Insurance Survival Guide for Newlyweds,
an easy-to-understand, downloadable resource that offers facts and tips to encourage couples to ask these questions early. And the NAIC’s new “I Do Adventures” interactive game uses lighthearted fun to drive home valuable insurance lessons. They are available at www.InsureUOnline.org
The survey highlighted several trends common to young couples:
- Though 61 percent of couples ages 18-24 talked about combining auto policies before marrying, only 30 percent cited their spouse’s driving record — a key factor in calculating premiums — as an important topic to discuss before marriage. In fact, across all age groups, more couples viewed “where we will spend the holidays” as more important to discuss before marriage than their partner’s driving record.
- 84 percent of respondents ages 18-24 said it was important or extremely important to share details about pre-existing health conditions before marriage. But before the big day, only 73 percent had addressed the topic of whose health insurance to keep.
- 62 percent of engaged or newly married couples ages 25-34 rated designating a beneficiary as important or extremely important to discuss pre-wedding, but only 42 percent even broached the subject of whether or not they will have enough life insurance before tying the knot.
The data suggests older newlyweds are just as likely to put off important conversations:
- 85 percent of engaged or newly married couples ages 55+ said a pre-marital discussion about insurance beneficiaries was important, yet only 40 percent exchanged thoughts on life insurance coverage amounts before exchanging vows. In fact, 33 percent of recently married couples ages 55+ had yet to discuss life insurance as long as one year after the wedding.
- Before tying the knot, recently married couples ages 55+ were more likely to have discussed their entertainment budget than their life insurance coverage (50 percent vs. 40 percent, respectively).
Having “The Talk”
To avoid misunderstandings, couples should have a pre-wedding sit-down to directly address auto, home, health and life insurance. Key questions to consider:
- How’s your driving history? Finding out your spouse has a lead foot after saying “I do” can be a shock to your psyche and your auto insurance premiums. If your partner has a less-than-ideal driving record, consider a named-driver exclusion clause, or you may want to think twice about combining coverage.
- Can we afford to renovate our home? As couples merge households, consider what that starter home offers now and will offer in the future. A renovation investment of $5,000 or more can change a home’s replacement value and insurance needs.
- Which health plan should we keep? The lowest premium isn’t the only consideration when deciding among health insurance options. To avoid a short-term decision that results in long-term increases in out-of-pocket expenses, review provisions related to cost sharing (deductibles, co-pays and coinsurance) and consider what is not covered by the plan.
- How much life insurance is enough? Now that “I” actually means “we,” couples should revisit life insurance coverage. To arrive at a new amount, consider future income potential, the cost of raising children and any outstanding mortgage payments.