Getting married? Check your insuranceApril 23, 2015
By Sheryl Smolkin
According to the 2014 Bridal Survey conducted by weddingbells.ca, in 2014 an estimated 162,056 weddings took place in Canada and 65% of them took place between June and September.
That means dozens of your friends and neighbours are probably trying to balance their wedding budgets, booking venues and “saying yes to the dress” as you read this blog. But how many of them are factoring in the impact their upcoming nuptials could have on their insurance or any previous estate planning?
The folks at the web site insureeye.com recently asked licensed life insurance broker Tamara Humphries for her opinion on what you need to know about life and health insurance if you are getting married. Here are a couple of interesting issues she raised:
- Amount of coverage: Once you get married, and especially if you have or will be having children, you should consider increasing in your life insurance coverage. There are various life insurance calculators online including this one from Sun Life that will help you calculate how much you need. Your financial advisor can also assist you.
- Group Benefits: Understand the life and health insurance plans both you and your partner have at work, and how benefits are coordinated. If one supplementary health plan is particularly good, you may wish to opt out of the other.
- Changing your beneficiary: If your previous life insurance policy named, for example, your parents as beneficiaries, you may want to make your spouse the beneficiary instead. You can change this beneficiary designation at any time upon notice to your insurance company unless you have made the beneficiary designation irrevocable.
- Family life insurance: As an alternative to two life insurance policies for each spouse, you can get one policy for both of you, which often results in lower premiums overall. This policy is often called family or joint-first-to-die (JFTD) policy. JFTD policies pay only at the first death. It is important to know if one spouse dies, the surviving spouse will not have life insurance. If you prefer to keep separate policies after the marriage and get the policies from the same provider, you might benefit from a multi-life discount.
- Look for bundles: Bundles still work. If you or your spouse already have a home and/or auto insurance provider, there may be an option to get a bundle discount when adding a life insurance policy from the same company. Some insurers, called universal insurers, offer all insurance products – life, property and health insurance.
Also keep in mind that when you get married, (see Public Legal Education Association of Saskatchewan) unless you indicate in your Will that you are making the Will in contemplation of the marriage or a spousal relationship, your entire Will is cancelled. This general rule does not apply where an individual makes a Will while living in a spousal relationship and later marries that spouse.
Ending a spousal relationship can also revoke or cancel your Will or parts of it. For example, if you name your spouse as your Executor or leave part of your estate to your spouse, those parts of your Will are revoked or cancelled after you divorce, or after 24 months of separation in the case of other spousal relationships, unless you expressly say otherwise in your Will.
In Alberta and British Columbia, however, new laws state that marriage, or the entrance into an adult interdependent partnership (common-law relationship) does not automatically revoke a Will.
Since the laws across the country are no longer consistent, deciding which laws apply if the person married in one province and died in another, can be unclear. Further, if a person marries or dies outside of Canada, the decision as to which law applies becomes even more complicated. To avoid such difficulties, it is best to enter into a Will and revoke the old one upon marriage, or when entering into a common-law relationship.