Getting married is a significant rite of passage in a couple's life. And while you'll probably become preoccupied with wedding planning from the moment you or your partner pops the question, it's far more essential to plan for everything that comes after you've said your vows.
As boring as it may seem, it's essential to examine how getting married will affect your financial and insurance needs. Before you tie the knot, you and your partner should discuss these nine questions to avoid any unpleasant surprises.
1. Should I insure my engagement ring?
According to a 2012 survey from the wedding planning site TheKnot.com, the average cost of an engagement ring is $5,431. That's a big loss if something should happen to your ring, so it's important to purchase insurance for expensive jewelry in case it's lost or stolen. Typically, homeowners or renters policies will only reimburse up to $2,000 for stolen jewelry, and they don't cover claims if the ring is lost.
For additional coverage, consider purchasing an optional "personal property rider" on your existing policy, which will provide coverage for the full replacement cost (the cost to purchase similar items in the same condition) of your valuables. You can also purchase a separate specialized jewelry insurance policy.
2. Should we purchase wedding insurance?
Often, the engagement ring is just a small expense compared to the entire wedding: TheKnot.com's survey found that the average wedding costs $28,400. Many venues require hosts to purchase venue liability insurance to protect you and the venue operators from liability claims for alcohol-related accidents or other property or bodily injuries.
Additionally, if you don't want to take the risk of your perfectly planned ceremony getting canceled due to bad weather or a family emergency, consider adding on wedding cancellation coverage, which typically covers up to $1 million in nonrefundable charges, according to Robert Nuccio, founder of the wedding insurance site Wedsure.com. Optional riders may also be available for coverage of gifts, attire and other valuables.
3. What is my partner's credit score?
If your soon-to-be spouse has a bad credit score, don't worry -- his or her credit score won't transfer to you when you get married. However, it could cause some other complications. For instance, if you plan to jointly apply for a loan or mortgage, your spouse's score may lead to higher interest rates.
Also, if and your new spouse combine your auto insurance policies, your partner's credit history could lead to higher premium rates. Make sure you've budgeted properly for the possibility of higher expenses in such situations.
4. Does my partner have a bad driving record?
If your partner has been deemed a "high risk" driver due to a previous license suspension or history of violations, he or she may not be eligible to purchase auto insurance through a traditional provider, and you could pay far more when placed in a high-risk category. In this situation, you should likely keep a separate auto insurance policy rather than purchasing a joint policy.
5. How much life insurance should we purchase?
Once you're married, "you do have a financial obligation to your spouse, so there is a need for life insurance to protect your surviving spouse if you're not around anymore," says Marvin Feldman, president of Life Happens, a nonprofit consumer advocacy organization.
Your exact life insurance needs will depend on your financial needs and whether you and your spouse have children to support; the Life Foundation offers a calculator to help you determine how much insurance to purchase.
6. Who are the beneficiaries on any existing life insurance policies?
If either of you have previously purchased life insurance policies, it's important to update the policy; this is the person who will receive your life insurance benefits when you die. If either of you have been married before, your former spouses are likely to be listed as beneficiaries, so be sure to update your insurance company with your new partner's name and information.
7. Should we maintain separate health insurance or purchase a family plan?
Policyholders are often eligible to add their spouse or domestic partner (and his or her dependents) to their health insurance plan. If you purchase insurance through an employer, your partner can probably save money on premiums by joining your plan, or vice versa.
One exception, however, is if one of you currently purchases insurance through the federal marketplace and is eligible for a subsidy, or if you receive insurance through Medicaid. In this case, it may still be cheaper to purchase coverage independently if you remain eligible for government benefits based on your combined household income.
If you're considering having children, it's important to make sure your plan offers maternity coverage.
8. Do we each have enough car insurance liability coverage?
When you purchase car insurance, you'll need a policy that meets your state's minimum liability limits to cover damage to other people or other property in the event of an accident. In California, for instance, the minimum coverage level is $30,000 for personal injuries of two or more people, with an additional $5,000 for property damage.
An accident victim can hold you personally liable for medical and property costs beyond your insurance limits, so you and your spouse should consider purchasing additional coverage to protect your joint assets in the event of a lawsuit.
9. Will we have enough homeowners or renters insurance?
When you live together, you'll generally want to take out a joint policy that covers your residence (if you own your house) and all of your possessions. It's important to take inventory of your items to help you decide how much insurance to purchase: For instance, if one of you inherits a $10,000 piece of artwork, that won't be fully covered under a traditional policy. You should purchase an additional rider to add supplemental coverage.