by Neil Mathieson, CPA, FICB
Couples getting together will often consider a joint insurance policy, however another option is to get separate insurance coverage.
For about 5-8% more, the couple can purchase two separate policies.
Why consider this?
Unfortunately, the frequency of divorces rivals that of marriages.
A divorce does not cancel the insurance contract. If the partners forget the policy, then should one die, the ex-partner could receive an unintended bonus.
Another instance, I frequently encounter is that years earlier, parents may have purchased a policy for a child, who is now grown.
Upon marriage or co-habitation, will the parents continue to pay the premiums of a now adult? The income tax act does permit a tax free rollover from a parent to the insured child.
At this time the possibly uninsured spouse should also buy insurance.
Why? If one partner dies unexpectedly the surviving partner will require help to cover living expenses, such as daycare funds to look after children.
Term insurance with a conversion feature to permanent, should definitely be considered.
Most importantly couples should talk about their financial past and future before getting married.
Avoid regrets; over 60% of couples found they were not financially compatible and wished they had discussed their financial side before saying “I DO”.