‘Are we sufficiently insured?’ The one conversation you must have with your spouse in your 40s
Many couples put off buying insurance, especially life insurance, considering the subject too morbid. But there are ways to bring this up by highlighting that it is actually a life-saver for your dependents.
“We need to talk.” Most people in marriages that have lasted a while get an anxiety attack when they hear this phrase. But sometimes it’s a relationship saver. This applies even more so to financial matters. For example, insurance on your spouse’s life.Talking about insurance with your spouse can be a touchy subject. After all, no one wants to dwell on thoughts about getting sick or living a life without loved ones. However, it’s a conversation that is better had rather than not had.Let’s explore how we can make it a lot less intimidating.
Timing matters a bit here—unlike in investing
While there is no specific “right time” to have this conversation, buying insurance requires a bit of perspective and cannot be an impulsive decision.
Ensure both of you have ample time to discuss the nuances. Otherwise, there is a likelihood of the matter getting the cold shoulder.
You can also choose to time it with life moments to tee up the conversation. There are a few life moments when people are quite receptive to long-term financial decisions. These can be:
· when a baby is born in the family· on his or her birthday· on buying a new house
· or a health incident involving friend
Talk about your family’s needs
Instead of mentioning death or getting ill, steer the conversation positively towards securing financial security and family goals. Highlight the dreams of your children or about the goal to become debt-free. I have noticed that for many clients this helps to steer the conversation from emotional situations to more of a problem-solving mode.
This can also mean asking difficult questions like: Will the family be able to afford to sponsor a child’s higher education, even with one income? Will there be sufficient money to take care of both of your ageing parents? Take stock of loans and what will happen if one of you is no longer around.
Taking stock of such facts will get your partner thinking about the need to protect the family from financial surprises.
Arrive at an appropriate life cover amount after considering various factors like expected income loss (from the death of a family member), the number of dependents, income years left for the earning members, and so on. You may already have an insurance policy that you bought earlier in life. Look at how it impacts your current need and whether it even fits the bill anymore.
Make a plan
In a family with two earning members, the family might have got used to a high-income lifestyle.
The passing away of a member could result in a family’s lifestyle or goals getting compromised. So there is a need to adequately cover both the partners regardless of whether they are earning or not. It will ensure the family is financially prepared for the worst possible outcomes.
While making the plan, ensure you set a timeline for action.
Is insurance expensive? Not really
Acquaint yourself with various types of pure insurance offerings—life insurance, medical insurance, car insurance, and so on. Do some research on the product features, costs and what type of plan will meet your needs.
Surprisingly, many partners feel that insurance costs a lot. It’s not if you seek a pure risk cover. If you seek a term cover, shortlist two to three insurers and be familiar with their premium quotes and features. Such comparisons will give the partner the assurance of the effort you have put in as well as its affordability.
Save your policy documents
Preparing for a worst-case scenario is incomplete without an effective mechanism in place to keep records. Both you and your spouse should know all the important details of your financial situation and assets. This should be documented and kept in a safe place known to both of you, as well as to a trusted third party. This third party need not be a lawyer but can also be a trusted friend or relative.
While it may seem morbid, you also need to have a plan in place for a true worst-case scenario where both of you are not there anymore. This will ensure that your children or dependents are taken care of no matter what.
Getting insured is all about family and thus needs a family decision. Leaving it for later or not discussing it at all can put your loved ones through additional stress through a very difficult moment for them. All of us, individually, know what the past two years have been like. Let’s do what we can to prepare—for the good as well as for the bad.
