Life Insurance For Couples Who Choose To Never Get Married

Long-term relationships increasingly occur outside of marriage, with data from the Pew Research Center indicating that the number of Americans living with unmarried partners has increased 29 percent since 2007. Across all age groups, most Americans now believe that cohabitation does not make a significant difference in modern society. With cohabitation, however, comes many practical concerns that would otherwise be addressed through marriage. Chief among them? Life Insurance for couples who choose to never get married.

Couples who abstain from marriage are not necessarily less committed to one another. Many are deeply concerned about their partner's future. Life insurance can offer long-term partners considerable peace of mind. Despite being unmarried, they can rest easy knowing that their partner would be covered should the worst-case scenario arise.

Life insurance remains a point of confusion for unmarried couples, many of whom assume that they do not qualify. In reality, however, most long-term couples are capable of securing the coverage they desire. Below, we examine the role life insurance can play in long-term, non-marital relationships. We also discuss whether it is worth pursuing for an unmarried couple.

Why Would Unmarried Partners Seek Life Insurance?

Marriage is no longer regarded as the only sign of long-term commitment in a relationship. Many unmarried couples intend to remain together as they grow old. As their relationship strengthens, they may obtain shared property and debts. The household they build may resemble that of a married couple, save for the actual marriage license.

Life insurance can provide a valuable element of protection for an unmarried couple while also delivering peace of mind. Couples can take solace in knowing that they will both be covered in the event of one partner's death.

Under What Circumstances Can Unmarried Couples Obtain Life Insurance?

Life insurance is well within reach for many long-term couples, even if they have no intention of formalizing their relationship. It's not difficult to obtain: you or your partner will simply need to have both

1. Consent from their partner;

2. and demonstrate that you hold an insurable interest. Essentially, insurable interest means that you will sustain clear financial hardship if your partner passes away.

Insurable interest is presumed for many relationships but is not automatically guaranteed for unmarried partners.

Obviously, it's easy for married spouses to demonstrate insurable interest. Presumably, they both contribute to their household — and depend on these shared contributions to get by. Should one pass away, the other would deal not only with emotional duress but also significant financial challenges.

With long-term partners, insurable interest may or may not be possible to prove. A lot depends on the nature of the relationship and how financially dependent partners are on one another. Partners who live separately and share no significant financial obligations may struggle to qualify for life insurance. This is because they need to demonstrate that they hold enough of an insurable interest.

Still, honesty is imperative when pursuing life insurance coverage. No matter your current relationship status or living situation, it is critical that you provide full transparency. For example, claiming that you're married when you're actually cohabiting could lead to a swift denial.

The good news? By proving some vested interest in your relationship beyond simple affection, you can probably obtain life insurance as a couple. The following are a few of the most common circumstances under which unmarried partners can secure life insurance policies:

Domestic Partners

The easiest means of demonstrating insurability without a marriage license? Registering for a domestic partnership. This involves more than simply cohabiting; it requires the completion of a legal document. Domestic partnerships are not available in all states or municipalities. However, when they are available this approach is highly advisable for couples who seek life insurance and other benefits outside of marriage.

Cohabitation

Like many couples who choose to forgo marriage, you may not be particularly interested in having your relationship formalized via something like a domestic partnership agreement. Thankfully, this is not the only proof needed to qualify for life insurance as an unmarried couple. If you live together, you may also qualify.

Ideally, your living situation will be documented via a signed lease or, better yet, a shared mortgage. Both indicate a financial interest in your relationship — together, you are both responsible for paying the rent or the mortgage. If one of you were to die, that bill would still need to be paid.

Children

Individuals who seek life insurance are generally presumed to have an insurable interest in their children — both biological and adopted. Having children can also indicate that partners have an insurable interest in one another. After all, both parties are responsible for contributing to their child's wellbeing. Typically, long-term couples who have children together also live together. Therefore they will be able to demonstrate insurable interest via leases or mortgage documents.

Business ownership

There are other types of insurable interest for an unmarried couple, such as co-owning a business. For example, if you and your significant other own a small business together and one of you passes away suddenly, you may have trouble keeping the business afloat. If you are co-owners in a business venture with your significant other, our article on key person insurance is a helpful resource to determine if your situation would qualify as insurable interest.

Naming a beneficiary

An easier way to ensure that your partner is taken care of financially is to take a life insurance policy out on yourself and name your significant other as a beneficiary. In this case, you would be the policy owner, you are the insured, and your significant other becomes the beneficiary. It is a much easier process than having your significant other be the policy owner, where you are the insured, and your significant other is the beneficiary.

What is the best type of life insurance for unmarried couples?

Once you have determined that you and your significant other can prove that you have an insurable interest, it is important to determine what is the best type of life insurance plan to purchase. For younger, healthier adults, a term life insurance plan is very popular due to the affordability of lower premiums, and you can pick a set term length to cover your finances for the near future. A 10-year term life policy may be enough to cover your finances until you are ready to be married, and you can always convert a term life policy to a whole life policy if you are interested in using your life insurance as an investment vehicle in your future.

Conclusion

With a greater share of couples choosing to forgo marriage, it is important that viable options be provided. Fortunately, it is possible for many serious partners to secure life insurance together. If you're currently in a relationship and don't anticipate tying the knot, you'll want to evaluate whether life insurance is right for you. It's best to determine whether you might qualify based on your living situation. No matter your official relationship status, you'll never regret planning for the future.