Consumers who make that important financial decision to take out life insurance on their spouses should first consult their partners to avoid making costly mistakes.
Lee Bromfield, CEO of FNB Life says insuring the life of your spouse involves more than just getting a policy as every committed relationship and marriage is different and has a unique set of financial needs and obligations.
“Before embarking on this exercise, couples should first reach mutual understanding on the type of life cover, amount insured, provision for children or dependents, beneficiaries, as well as their broader financial responsibilities, to ensure that they are adequately protected in the unfortunate event that one of them falls ill or passes away,” says Bromfield.
He advises couples considering taking this important financial step to avoid making the following mistakes:
Not getting your partner’s consent
Get your partner’s consent before starting the process as this improves transparency and removes the element of surprise when one partner gets a call from a provider to finalise the take up process.
Not being clear on what you both want
Couples predominantly take out life insurance for two main reasons, one is to protect assets and the other is to safeguard their financial future.
“It’s important to be on the same page about what to cover and for how much. This is also an opportunity to agree on who you both want as beneficiaries, even beyond just the two of you,” he says.
Reluctance to seek financial advice
In some cases, couples may want to consider using the services of a financial adviser to get the real picture of their financial situation.
“Professional advice is very useful when a couple does not agree or are simply not sure about what to insure and for how much. An adviser could be helpful as they would look at the finances of both partners and make recommendations on how to take up the most suitable type of insurance,” he adds.
Not keeping each other informed of any changes
Even though you may have consulted or informed your partner before taking out a policy, you still need to keep one another informed about important policy changes.
“The last thing you want as a spouse is to assume that you are still your partner’s sole beneficiary only to find out that’s no longer the case,” concludes Bromfield.
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