Tying the knot? Congrats! Walking down the aisle can be one of the most thrilling (and, perhaps, overwhelming) times of your life. You're about to join forces in life and love — but also in your finances.
While you may just want to focus on the joy of being married (hello, honeymoon!), now is the time to prepare for your future together, through thick and thin, richer and poorer — putting some emphasis on the thinner and poorer parts, just in case, because that's when things can get rocky.
Because life is full of unexpected curveballs that could rain on your marital parade, it's smart to establish a financial safety net so you're more prepared for whatever may come. Here's how you can deal with the stuff life throws at you, and avoid letting it throw off your happily ever after.
“Aim for life insurance coverage that is five to seven times your current net income.” — Canadian Life and Health Insurance Association
1. In sickness and in health...
When you're in the honeymoon phase, it's easy to feel like you're on cloud nine. But some vows say “in sickness and in health” for a reason. Sure, we all want to believe we're invincible but, accidents or illness could strike at any time.
If one of you were to become seriously ill, it's likely you'd need some time off from work to heal or take care of yourself or your spouse. That's why you may want to look into critical illness insurance, which can help pay for living expenses and medical treatments not covered by the public health care system. This will help ensure you're not forced into debt if you find yourself relying on just one salary.
2. For richer and poorer...
When you promise to stick around through “richer and poorer,” you may not be thinking about the worst-case scenario. However, job security isn't a given, which is why it's important to prepare for the unthinkable: Getting let go.
You may want to consider getting a life insurance policy that's independent from the one your employer offers you. Not sure where to start? We offer different types of term and permanent life insurance and can help you find the solution that's right for you.
You may also want to consider putting away up to six-to-12 months’ worth of expenses in an emergency fund (try to save a percentage of each pay cheque). It will offer you another layer of support should you need it.
Tip: Put your money to work in a high-interest savings account.
Did you know? According to the Canadian Life and Health Insurance Association, you should aim for life insurance coverage that’s five to seven times your current net income. Our Life Insurance Calculator can help you determine the right coverage to suit your needs.
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3. In good times and in bad...
You may be dreaming of your honeymoon or future travels, imagining yourself strolling along the Champs-Elysées or sunbathing in Belize. But sometimes life can get in the way, and you may need to cancel a trip.
Even if you do sail off into the sunset, your holiday could take a turn for the worse if a medical emergency happens while you're away. Suddenly your Instagrammable vacation can turn into a real-life nightmare.
Travel insurance can help recover costs from your canceled trip, as well as offer assistance for any medical treatment you may need while you're on holiday.
Did you know? You can get travel insurance from BMO Insurance for a single trip or sign up for a plan that keeps you covered all year. Whether you're a casual traveler or constantly on-the-go, we have options, so you can choose the right one for you.
4. As long as we both shall live...
When you get married, your vows may include “til death do us part,” but are you financially prepared for that possibility? We all want to grow old and gray together, but it's best to be prepared should the unthinkable happen.
You may wonder, should I get life insurance? The reality is that relying on a single income to cover expenses and debt can be tough. And while life insurance may seem complicated, unnecessary, or even expensive, it can make your life a whole lot easier in the future. Not only can it help cover some of the loss of income and funeral costs — which may be more expensive than you think! — it can also help you pay off any remaining debts. Plus, it can help cover tuition for your children, which is not cheap either.
You can look into individual life insurance or even joint life insurance, which can cover two people under one policy and provide certain tax benefits. Regardless of which type you choose, getting a life insurance policy can help protect your family.
5. Not-so-happily ever after...
When you're preparing for your wedding day, it's easy to think your love will last forever.
Unfortunately, divorce does become a reality for some couples, and not all of them are prepared for the financial fallout.
We hope it never happens to you, but if it does, it's key to examine your current life insurance policies, as well as any spousal coverage benefits to which you may be entitled. Also, your beneficiaries — the people you're leaving money to — should be re-examined. File that away, just in case.
When you're about to say “I do,” you're madly in love and all is well in the world. However, a lifetime together may come with some bumps along the way, so use these tips to prepare your financial safety net together.
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These comments are general in nature and should not be construed to be legal or tax advice, as each client’s situation is different.
Please consult your own legal and tax advisor.
*BMO Life Assurance Company