Tips for Buying Life Insurance for Unmarried Couples

Life insurance is most commonly purchased with a spouse or children as named beneficiaries. These are individuals who the insured has a direct legal connection to and who likely will be financially impacted by the insured's death. The typical unmarried couple who have only been dating casually for a few months do not have this type of financial connection. However, some unmarried couples are financially intertwined in various ways. With this in mind, you may be wondering if you can buy life insurance for unmarried couples and if you should.

Reasons to Buy Life Insurance on a Significant Other

Unlike buying life insurance for newly married couples, most unmarried couples have no reason to carry life insurance against each other. However there are some situations when buying coverage makes sense. These are a few of the more common reasons why buying life insurance may be in your best interest:

  • You have shared debts, such as a car loan in both of your names.
  • You have children together.
  • You have signed a lease together.
  • You share ownership in a home or business.

There are other reasons, but for most people, getting life insurance for new parents is definitely the most important of these. Keep in mind that you cannot buy life insurance against your significant other without his or her consent. Rather than buying life insurance for your significant other, it may be easier for you to buy coverage for yourself and name your significant other as a beneficiary. Your significant other can also buy life insurance in this manner with you as the named beneficiary.

The Need for an Insurable Interest

Insurance companies need to clearly see that there is an insurable interest. For example, in the case of a married couple, the insurable interest or financial connection between the two spouses is usually obvious. With an unmarried couple, this may be more difficult to prove. In addition, it may not be reasonable to purchase life insurance for someone who you have only recently entered into a relationship with. An insurable interest basically means you have financial benefit for that person being alive, and your financial situation may decline if that person passes away. Both consent and an insurable interest are requirements for this type of coverage with most providers.

Tips for Buying Life Insurance for Unmarried Couples

Common Categories That Unmarried Couples Fall Into

There are several categories of unmarried couples who may want to consider buying life insurance for each other. These include:

Registered Domestic Partners These are individuals who are cohabitating and who have taken the additional step of legally registering their partnership status with the state. You may need legal representation to register as domestic partners. Be aware that this status is not available in all locations.
Cohabitating Couples or Business Partners Regardless of whether you have signed a lease on a home or started a business together, you may easily show a financial link to your significant other if you are business partners or if you live together.
Couple with Other Financial Connections If you are not living together or business partners, you may still have other shared financial interests. For example, you and your partner may have taken out a car loan together. Another financial connection may be if you share custody of biological children out of wedlock.
Engaged Couples Regardless of whether you live together or not, if you are engaged and have a set wedding date, many insurance companies may view you as already being married for all intents and purposes. You may still need to obtain consent and prove an insurance interest.

Types of Life Insurance Available

You do not need to be legally married in order to have a financial connection with your significant other. Now is a great time to consider how your life would be impacted from a financial perspective if your significant other passed away and vice versa. If you have decided to pursue life insurance for unmarried couples, you need to understand the types of coverage are available.

While there are several categories of life insurance policies, the most common type of coverage that may be purchased by unmarried couples is term coverage. You can set a reasonable term length and benefit amount based on your unique situation. The longer the term is and the higher the benefits amount selected, the more expensive the premium is. There are many benefits to term life insurance. While you may benefit financially by purchasing life insurance for unmarried couples, you must review your budget and verify that the premium is affordable.

Being Prepared

The thought of you or your significant other passing away can be difficult to consider, but you must plan ahead for every possible scenario. Because death is inevitable for everyone, you must understand how your death would impact your significant other and vice versa. It can be challenging to purchase life insurance for an unmarried couple because of the need to show an insurable interest, making the effort to set up coverage may help you and your loved one avoid financial hardship in the future.

To make the entire task much easier and streamlined to deal with, connect with a life insurance agent online who can help walk you through each step and make finding the right coverage as easy as possible.