Being married can save you money on insurance

Did you know that if you're married, you're probably saving money right now on insurance? In addition, you may be able to garner some additional savings if you know where to look.

Car insurance

Your car insurance company has likely already used your marital status in calculating your premium, along with your age, driving record, where you live and other factors. It's a savings that most married people don't even know they're getting, and it's most significant for young married drivers.

According to State Farm, the nation's largest auto insurer, men and women under age 25 will generally see a noticeable drop in car insurance rates if they get married. For example, a 23-year-old male living in Indianapolis (with a clean driving record) can expect to see a 26 percent drop in premium if he marries.

"Our data shows that younger people tend to be more responsible drivers when they are married," says Holly Anderson, spokesperson for State Farm. "We're not sure why that is, but that's based on our claims."

Marital status is also a pricing factor for older married couples, but the drop in rates is most visible for younger couples, since their age already puts them in a high-risk category.

"Hopefully, couples have a better reason to get married than getting a discount on auto insurance, but it's one of the benefits of wedded bliss," Anderson says.

Insurers stress that marital status is a very small part of a complex underwriting formula. Because factors like location influence rates more than marital status, a single person in one state could pay less for insurance than a married couple in another state.

A few states do not allow insurers to consider marital status in the underwriting process. Robert Passmore, director of personal lines for Property Casualty Insurers Association of America, says that some states set limits on what factors insurers can use in the underwriting process, including marital status and gender.

Home insurance

Some home insurance companies may also use marital status as a factor in determining your cost for home insurance, although marital status is used more widely in pricing auto insurance. Nationwide Insurance, for example, does not use marital status to set prices for home or car insurance, but the company does offer a 5 percent "personal status discount" for married couples.

Life insurance

You won't find rates based on marital status when you buy life insurance. But there are still ways couples can save together on life insurance.

It's possible to insure both a husband and wife under one life insurance policy at a price that's cheaper than insuring them both separately. Under a survivorship (also called second-to-die) policy, a husband and wife are insured together and the benefit is paid after the death of both. This kind of policy is commonly used by couples who want to provide funds for their heirs to pay sizeable estate taxes.

Premiums for survivorship life policies are almost always less expensive than if the same two people purchased separate permanent life policies. For more, read about the advantages of survivorship life insurance policies.

Married people also have the advantage of being able to join a spouse's group life insurance. When one spouse has group life insurance available at work, the other can often join at the same group rates. While group life isn't portable (it doesn't go with the employee if he or she leaves the job), it is a cost-effective way to purchase life insurance.

A small number of life insurance companies offer a discount when two people in the same household buy policies. For example, Savings Bank Life Insurance Co. of Massachusetts offers a "common billing discount": When two members of the household each purchase term life policies of $300,000 or more, their annual fees are reduced from $60 to $30 each. You don't necessarily have to be married to enjoy the savings.

You'll also find some life insurance companies offering "spousal riders." This is where you buy a life insurance policy for yourself and add coverage for your spouse as a rider to your policy.

This probably won't save you money if your spouse is healthy; in that case, he's better off buying his own fully underwritten policy. But if he has health conditions or other risk factors that would make an underwritten policy very pricey or unavailable, the spousal rider is a way to lock-in coverage and save money.

Long-term care insurance

If you're shopping for long-term care (LTC) insurance, ask your agent about a couples discount. Jack Dewald of the Life and Health Insurance Foundation for Education says that almost all LTC policies provide discounts for married couples — some by as much as 40 percent. Dewald says the reasoning is that when one spouse needs care, it is likely to be done in the home by the other spouse rather than in an expensive facility.

Health insurance

Health insurance can eat up the biggest chunk of your insurance dollars. Unless you're in a group health plan, pricing is based on your individual factors. Even if a couple buys a health insurance policy together, the price will be equal to what they would pay separately. Working couples who are lucky enough to have a choice of group health plans can compare plans and pinpoint the best value.

Ethan Slavin, spokesperson for Aetna, advises that "working couples should carefully examine their options each year to decide what's best for them. Depending on the plans offered and the contributions that employers require for employees and dependents, what's best for one couple is not best for another — and that best scenario can change from year to year as employers change their plans, benefits structures and contribution strategies."