June 4, 2021

happy couple umbrella

Do unmarried partners automatically receive the benefit from a life policy?

In short – probably not. If you are cohabiting and your partner has not made a will or has not written their insurance policy in Trust, the insurance benefit will pay out to their closest family member and NOT their partner as British law states.

There is still a huge misconception that a couple who have been living together long-term have similar rights to those who are married. It is important to know that this is untrue and that in fact cohabitees are viewed very differently in legal terms.

Nothing comes to a cohabitee by virtue of their relationship, so whether you’ve been living together for two months or 20 years, you could run the risk of receiving nothing from a potential payout. A partner could be entitled to a partial payout if it were established that they had some general property rights, and if there are children involved then some provision could be allowed for them until they reach adulthood, but quite often that’s all.
Not knowing your rights – or lack thereof can be costly!

However, there are many things you can do which would reflect your contributions and your needs fairly without marrying if that’s your preference. But, if you are in a long-term relationship and are expecting to automatically be compensated or taken care of should the worst happen, then you could be in for a nasty shock.

According to the ONS, as of November 2019, the overall number of cohabiting families in the UK rose by 8% between 2008 and 2018, from 17.7 million to 19.1 million.

Our Case Study

We were approached by Mrs R. whose partner had passed away. They were not married and had not been advised by the adviser who arranged their policy to put it in Trust. If a couple are not married and have not made a Will or put a Trust in place, then the life insurance proceeds will be paid out in accordance with current Intestacy laws.

In this case, rather than Mrs R. receiving a lump sum to pay off the mortgage, their grown-up son from a previous relationship inherited the money and she may now need to sell her home.

Client ID no 130459754

All our case studies are based on actual client scenarios, many of which pre-date 2021.

What you can do:

PROTECT your loved ones with Insurance – At present three-quarters of cohabitees don’t have life cover*

Life Insurance – should one of you die or be diagnosed with a terminal illness
Critical Illness Insurance – Where a policy would pay out a lump sum in the event of you being diagnosed with an illness covered by the policy. Certain Cancers, Multiple Sclerosis, Heart attacks, Strokes, Kidney failure, Coronary artery bypasses, and major organ transplants. Many people take out critical illness cover to ensure their mortgage debt would be paid off if they were diagnosed with one from a specific list of serious conditions
Income Protection – A policy that will provide replacement income if you were unable to work as the result of an accident or sickness. Especially important if there is only one income coming into the household

At Future Proof, we help all our customers to place their cover in Trust at no additional cost. Meaning, that you and your partner can protect each other and your dependants (if applicable).

Setting up a Trust means the proceeds of an insurance policy go directly to the surviving partner. This can be used to pay off any mortgage or other debts and secure your future, leaving absolutely no uncertainty as to where the benefit goes.

Trusts are not regulated by the Financial Conduct Authority.

It’s worth bearing in mind, and everyone’s situation is different. If you have any questions or would like no-obligation advice, please call one of our friendly advisers who will be happy to explain your options.

Please view our Guides for further information on what cover is right for your situation.

Next steps

Whilst you are welcome to get a quote online, we would recommend you speak to one of our advisers.

Any quote that your adviser provides you with will take into account your circumstances and medical history, as well as your budget!

An online quote is just that – a quote – it isn’t a definite offer of cover. What really matters is the premium you are offered, after your application has been assessed.

Call Freephone 0800 644 4468 – Monday to Thursday from 09.00 to 19.00 and on Friday between 09.00 and 17.00.

Call me back

Please feel free to read our Independent client reviews, or read about the team at Future Proof

Jon’s moving story – being diagnosed with cancer

The protection industry pays out over £5.7bn in claims in 2019

What questions will an adviser ask me?

Will my claim be paid?

Why you can trust Future Proof.

The benefits of an index-linked insurance policy

Take a look at our handy guides ‘What Cover is Right for me?’

Do you suffer from a medical condition and concerned you can’t secure Life Insurance?  Please view our ‘Medical Guides’ for further information.

Whilst we will endeavour to help someone arrange insurance, there is no guarantee of success.  All applications are subject to underwriting.

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