You may already be married or planning on tying the knot, but it is important to iron out the financial questions that can have an impact on your relationship. Life insurance is one of them.
While taking out joint life cover is possible in South Africa, it doesn't mean that your partner will automatically be a beneficiary. Here is what you need to know.
Why do you need life insurance once you are married?
Marriage doesn’t automatically mean that your life insurance needs change, but the majority of the time there is a shift that is required.
Why? Because marriage typically does have a large impact on your future and your insurance needs – you now have a spouse to provide for if something goes wrong. You may be considering children in the future, and you may have taken on extended family that you’ll need to provide for at some point.
Protecting what matters to us the most is crucial, and life cover can be one of the ways you can create a financial safety net for you and your spouse. You can use a life insurance calculator to find out how much you will need.
Why they will not automatically be a beneficiary?
A beneficiary is someone who you select to receive the payout from your policy. A policyholder has the option to add and remove beneficiaries as they see fit to make sure that the right people receive the payout. This means that a spouse can choose to add their partner or leave them out as a beneficiary.
They will not automatically receive the payout once their spouse has died. As long as they are not listed as a beneficiary they will not be able to place a claim on the payout. Therefore, it's crucial to list and keep your beneficiary list up to date to make sure that insurers know who to give the payout to.
Should you both have a policy in your name?
Under most circumstances, yes, both partners should be insured. Stay at home parents and women, in particular, tend to be underinsured.
For instance, if you are a stay at home parent it could be for a huge variety of reasons.
Perhaps it is because childcare is expensive and someone needs to look after the young kids. Perhaps your kids of school-going age need someone to take care of them after school. Or it might be that there’s no other way to get the school run done, as well as have someone who is able to cook, clean, take the children to activities, help with homework and so on.
If you are co-owners of a house and received approval for finance based on both salaries, you’ll also need life insurance for both spouses when you buy the house.
If you’re married and want to take out life insurance, it’s important that both of you are covered. Whether you do that via a joint policy or two separate policies is down to individual preference and the availability of different life cover options on the market.