If you’re involved in a traditional marriage and have 1.93 children, or whatever the current average family size is today, you understand the need for affordable life insurance. You buy a policy because you want your family to be financially protected in the event that something should happen to the principal breadwinner. Life insurance simply represents stability and stress relief.
In the past, that “principal breadwinner” was almost always the husband, and he wanted to provide support for the stay-at-home wife and their kids in case something happened to him.
But life isn’t so … traditional … anymore, is it? There are all kinds of Georgia households today and all kinds of loving families, and many of them are just as in need of life insurance as the traditional family. That’s why it’s important to know that many of these less conventional households can also get affordable life insurance.
Before we get into it, let’s start with a basic definition.
What Is Meant by a Non-Traditional Household or Relationship?
Non-traditional relationship structures are just about everything else than a conventional marriage between a man and a woman. That’s our starting point..
This encompasses same-sex marriages and unmarried couples living together, with or without children. It can even encompass non-sexual relationships in which people have shared households and live as roommates for extended periods.
For our purposes here, we’ll even count former spouses as unconventional relationships. The reason for this is that an ex receiving child support or spousal support might insist on insuring the former partner so that this form of much-needed support doesn’t suddenly stop upon the death of the former spouse.
Now that we’ve defined terms, we’ll look into what kinds of non-traditional households and relationships are the likeliest to be able to obtain affordable life insurance on each other.
Under What Circumstances Can Non-Traditional Couples Obtain Affordable Life Insurance in Georgia?
For starters, no one, whether in a traditional or non-traditional relationship, can buy life insurance on another party without their permission. It makes sense when you think about it. You could imagine how fearful you might be at the thought of some stranger insuring your life for a million dollars. You’d be constantly looking over your shoulder. So both partners must agree that insuring the life of one party is an action that should be taken.
You must also have what’s called an “insurable interest” in the other party. What this means is that this other person’s death would be a financial hardship for you. The idea here is that the death of the insured party should be financially disadvantageous to the survivors in order for a life insurance policy to be granted.
In a traditional marriage, this concept is easy to see. You and your spouse might have a mortgage or an apartment lease. Maybe you have car payments or jointly own a Georgia business. Or it could be that only one of you works full time outside of the home, and the other partner has only a part-time job or takes care of the kids full time.
Illustrating this concept of insurable interest in a traditional marriage, the principal breadwinning partner is insured to provide continued financial security to the rest of the family in the event of that earning partner’s death.
Many non-traditional relationships also have an insurable interest. If they live together and are jointly responsible for house payments and other bills, particularly if one partner earns considerably more than the other, it’s usually not difficult to get an affordable life insurance policy on that higher-earning partner.
Couples with underage children in Georgia can also count on being able to get life insurance policies, whether they’re married or not — and whether the marriage or relationship is straight or same-sex.
If you are in a relationship, but you don’t live together and don’t share any bills or provide financial support to one another, it would be much more difficult for either party to obtain a life insurance policy on the other. Again, there must be insurable interest involved.
How Much Life Insurance Should We Have in Georgia?
That’s an important consideration whether you’re in a traditional or non-traditional relationship. You might use this unofficial rule of thumb as a starting point for the discussion: Invest in a policy with a death benefit that’s 10 to 15 times your annual salary. So if you make $50,000 a year, you’d carry a policy on your life for somewhere in the vicinity of $500,000 to $750,000.
From that starting point, think of your family’s needs. Do you live in an expensive city in Georgia or one with a lower cost of living? Is your housing almost paid off? How expensive is it? Would your partner be able to find a higher-paying job if you were no longer on the scene? Are there young children involved? For how much longer will they need your financial resources? Do you have money saved for their college education?
After answering these and a multitude of similar questions, get cost quotes from your insurance agent and determine what you can afford. That’s always a critical factor.
What Kind of Life Insurance Do We Need in Georgia?
There are several kinds of life insurance, but most fall into one of two main categories: whole life and term. As its name suggests, whole life insurance will cover you for your whole life (as long as you continue to pay the premiums), while a term life policy covers you for a pre-determined period, not your whole life.
Let’s take a closer look at both types of life insurance coverage.
Whole life insurance is a policy that’s supposed to end with the policyholder’s death. If you carried $500,000 in whole life coverage and continued to pay your premiums, your beneficiaries would share in the $500,000 death benefit at the end of your life. That’s literally as guaranteed as death.
A term life policy, on the other hand, offers coverage for a stated period only. Let’s say you have young children and only want to make sure they are financially secure while on the road to adulthood. You figure that in 20 years, the kids will have grown, graduated from college, and begun their own careers. At that point, your financial contribution is no longer necessary.
So you take out a 20-year term life policy for $500,000. If you die during that coverage period, your beneficiaries will receive the financial support of that half-million dollars. But if nothing happens to you during that time, the policy ends, and there’s no payout.
As you might imagine, a term life policy costs less than whole life. That’s because there’s no guaranteed payout. If you were only 30 years old when you signed the contract for that 20-year term policy, the insurance underwriters figure that the odds are pretty good that you’ll still be with us by age 50. Compare that to a whole life policy in which the death benefit will definitely be paid at some point in time.
Which is better for your situation? It depends on whether your goal is to offer financial protection only when your loved ones are at their most vulnerable, such as when your family is young, or whether you want to leave them with a nest egg when you’re gone. Another factor, of course, is what you can afford.
This is an important conversation to have with your Georgia life insurance agent.
Why Should You Consult an Independent Georgia Life Insurance Agent?
Your first step to determining the form of life insurance that you and your non-traditional family need and how much you should carry is to open up a dialogue with your Georgia insurance agent. This person can answer all of your questions and perhaps even bring up issues you have not considered.
If your advisor is an independent life insurance agent, they’ll be able to bring you an expanded choice of life insurance products. That’s because independent life insurance agents don’t work exclusively for a single insurance company. They represent the insurance products of multiple carriers. That means that your independent agent can listen carefully to your needs and budgetary concerns and then go shopping for the ideal coverage based on your unique demands. You’ll also be presented with the best tailored and most affordable life insurance policy for your non-traditional household.