Scottish Widows  

Unmarried couples risk losing out on life insurance pay outs

Unmarried couples risk losing out on life insurance pay outs

Financial advisers need to help unmarried couples take a fresh look at their finances this year with research suggesting almost half (43 per cent) of partners have made no plans to ensure their other half receives a payout if they die.

A survey published by Scottish Widows today (January 4), also found only half (52 per cent) of unmarried adults who are in relationships know whether their partner even has a life insurance policy.

With UK marriage rates declining by 50 per cent since 1972 according to the Office for National Statistics, Scottish Widows said “it’s more crucial than ever” for couples to discuss how their relationship will affect their future finances. 

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“Our research has shown that unmarried couples find it difficult to talk about planning for the worst and proactively avoid it as they don’t feel it is important,” said protection director at Scottish Widows, Rose St Louis.

“However, despite being difficult to discuss, there is an urgent need for transparency to ensure long-term security.”

St Louis said as marriage rates continue the decline, financial advisers have a crucial role to play by supporting couples sensitively through this process and ensuring they understand the different protection offered to them. 

“Helping to facilitate these conversations so they can handle the issue sensibly and sensitively is an integral part of professional advisers' role in today's society.”

Out of the half of unmarried adults who are in relationships that know whether or not their partner has a life insurance policy, more than a quarter (27 per cent) are unaware of the policy’s value.

Levels of awareness around partners’ finances are lower among couples who are not married, too.

Some 60 per cent of married same-sex couples know exactly how much their partner earns, and 53 per cent of people married to someone of the opposite sex know the same.

This knowledge drops to 47 per cent for same-sex couples, and to 45 per cent for opposite-sex couples among couples who are not married.

These figures, which are based on a survey of 2,000 UK adults carried out in September, also show that same-sex couples are more likely to talk about their finances than opposite-sex couples.

Nearly a quarter of married same-sex couples (24 per cent) discuss long-term financial matters on a monthly basis, whereas married opposite-sex couples only do this every two or three months.