Many newlyweds spend more time thinking about pizza than insurance.

The bite from this oversight can be sharper than anchovies because you’re beginning to build assets and it’s time to think about the unthinkable.

“If the couple doesn’t have kids, they may not need life insurance right away,” says Mark Stempel, a certified financial planner and principal at Mark Stempel & Associates in Tucson, Arizona. “If one can work if the other passes away, it doesn’t make sense at first. But if the couple acquires a house and later has children and the surviving spouse doesn’t earn enough to make the mortgage payment, then it’s time to look at life insurance.” 

There are five basic kinds of insurance: life, homeowner's (or renter's), auto, health and disability. Most newlyweds have little personal property, are in good health, have clean driving records and are on the long end of the actuarial tables. These factors make insurance affordable.

You may not need a lot of coverage early in life, but think about the type and amount of coverage you need as your responsibilities and assets grow. 

Providing For Loved Ones

Start with the worst thing imaginable: the death of a spouse. If both of you work, you may need to replace the deceased spouse’s income during a transitional period. You won’t have to cover the lost income forever because a young person’s strongest asset is the ability to change by retraining or getting an advanced degree and beginning a new career in a more challenging and better paying field.

If you plan to have children, you’ll need life insurance. This will allow the surviving spouse to stay in your first house if you die prematurely. For starters, think about coverage totaling seven to 10 times your annual income. Be sure to increase the death benefit when you have your first child.

There are many online life insurance calculators that will help define the basics and come up with ballpark figures before talking to an insurance agent. The industry is highly competitive so shop around for the best price. Then read up on the quality of coverage and how promptly and fairly a company responds to claims. A.M. Best’s online review is a good place to start.

Term and permanent insurance are a good way to provide income replacement income for your spouse and family. Permanent insurance comes in two basic types: universal and whole life.

• Term life pays a survivor benefit, called the policy’s “face value,” if the insured croaks within the period specified by the policy – typically five, 10, 20 or 30 years. If the insured person outlives the term of the policy, no survivor benefit is paid. The policy’s cost is determined by the life expectancy of the insured, making it affordable for young adults.
  
  
• Permanent insurance pays the face amount of the policy no matter when you die. In general, the cost of the insurance doesn’t increase significantly with age. The policy also builds “cash value.” The insurance company invests your premiums – the amount you pay for the coverage – and you earn interest. You can use the cash in an emergency by taking a loan against the policy. However, this reduces the amount paid to your survivors if you die before repaying the loan.
  
  
  • Universal life insurance is a little like buying a condo. The cost is higher than renting, but usually less than buying a single family house. Like a condo, some monthly costs may increase and will continue when the mortgage is paid. You’re building equity and a universal policy has permanent value, even if you don’t die during the stated coverage period.
    
    
  • Whole life insurance is more like buying a single-family house. The initial cost is higher than a condo, it requires more up-front money and the monthly payments are higher. The survivor benefit coverage costs the most, but comes with the opportunity to build equity as long as you hold the policy. Whole life insurance comes with a higher premium than a term policy, but the coverage is effective for your entire life.

Home Sweet Home

Young couples need to think about insuring their household goods. You won’t have much to start, but it’s a good idea to cover the replacement cost of your TV, stereo, camera, kitchen equipment and clothes with renter’s insurance.

Avoid Car Trouble

You’re required by law to insure your car, even if it comes with what some might optimistically call rust highlights. You can save by increasing the deductible, but don’t skimp on the liability coverage.

Healthy and Happy

Most newlyweds will have health insurance through their employers. Read the coverage carefully and think about upgrades. There’s no need for each spouse to carry the other on the employer-provided coverage. This looks like a way to boost coverage, but read the fine print. You’re probably burning money and getting little or no extra coverage.

Check the maternity coverage before you decide to start a family. In general, it’s a good bet to go with the husband’s policy, especially if the wife plans to remain at home with the baby for an extended period.

Dealing with Disability

Disability insurance is important when two incomes are needed to cover monthly living expenses because an extended illness could hammer your income. Most states provide some disability coverage – check your pay stub. You can supplement it with private coverage at low cost.

Insurance is duller than cold pizza. But remember the goal is to provide adequate coverage in case of the unforeseen or the unthinkable.