The latest bulletin from the Office of National Statistics shows that cohabiting couple families are now the fastest-growing household type in the UK, with more than 3.6 million couples record in 2023.
Marriage isn’t for everyone. But while legal protections for married couples and civil partners have improved in recent years, cohabiting couples in the UK still have very limited rights. If your partner dies without a will or life insurance in place, you may not automatically inherit property, pensions, or savings.
This gap can leave surviving partners facing serious financial hardship. Read on to find out how life insurance could protect you and your partner if the worst was to happen.
Legal rights for unmarried couples in the UK
Many people believe in ‘common law marriage,’ but it does not exist in the UK. Unmarried couples do not have the same legal rights as married couples or civil partners.
- A recent study showed that nearly half of UK adults (47%) still believe in common law marriage, even though it has no legal standing.
- Married couples have an automatic right to inherit property and pensions.
- Unmarried couples must actively plan. Without life insurance, a will or a trust, surviving partners may face financial vulnerability.
Risks for unmarried couples include:
- No entitlement to bereavement benefits.
- No automatic inheritance of property or savings without a will.
- A risk of legal disputes with extended family over the estate.
The Citizen’s Advice Bureau warns: “If you’re living together, you generally have fewer rights than if you’re married or in a civil partnership.”
How can life insurance protect my family?
No one wants to think about dying, but it is important to make sure that you have financial protection in place for your partner and children after you are gone
Life insurance can:
Protect your partner
Taking out a life insurance policy is one way to protect your partner and children by reducing the risk of financial crisis if they were left without your income, pension or a bereavement allowance.
A pay out could help to:
• Pay for your funeral
• Pay off the mortgage
• Clear debts such as car loans and credit cards
• Cover household bills
• Maintain your partner’s lifestyle by paying for clothes, holidays and dining out.
Protect your children
Cohabiting couples do not have the same legal protections as married couples or civil partners. While some bereavement benefits are now available to eligible cohabiting partners with dependent children, they do not automatically inherit their partner’s estate or have the same legal rights as married couples or civil partners.
Raising a child in the UK now costs significantly more than before. According to the Child Poverty Action Group, the cost to raise a child to age 18 in 2024 is around £260,000 for a couple and £290,000 for a lone parent.
Life insurance could help to cover the costs of raising children and help older children to get a start in life.
You can also write your life insurance policies in trust, which may help to speed up pay-outs and reduce inheritance tax.
For more information read our guide to life insurance plans or speak to a qualified financial adviser.
Protect your policy
If a life insurance policy is written in trust, the proceeds of the policy can be paid directly to the beneficiaries rather than to your legal estate.
By writing life insurance in trust, you can avoid inheritance tax and maximise the pay-out for your loved ones. The pay-out would also fall outside the probate process, reducing the risk of inheritance tax and making it quicker and easier for your partner to receive their pay out.
Types of life insurance for couples
There are various ways to protect your family’s finances should the worst happen.
Here’s some information about different types of life cover:
| Type of Cover | What it is | Pros | Cons | Best for |
| Term Life Insurance | This provides cover for a set period, for example, 25 years. Options include level term (fixed cover) or decreasing term (reduces with mortgage) | – Affordable premiums – Flexible cover amount and term – Good for mortgage protection | – No pay-out if you outlive the policy – Premiums increase with age at application | Couples with mortgages or set debts |
| Whole of Life Insurance | This covers you for your entire life, guaranteeing a pay-out whenever you die | -Guaranteed pay-out – Useful for estate planning – Can cover inheritance tax | – Higher monthly premiums – May be investment-linked (values can fluctuate) | Couples wanting lifelong security |
| Over 50s Life Insurance | This is for people aged 50–80 without medical checks. Lower pay-outs but affordable | -Guaranteed acceptance – Fixed premiums – Helps cover funeral costs | – Lower pay-out than other types – Usually include a waiting period | Older couples or those with health issues who want guaranteed cover |
So, it’s never too late to take care of your family. With our Over 50’s Life Insurance Plan, you will not be asked any medical questions and cover is guaranteed. Your loved ones will be provided with a tax-free cash lump sum when you die, and you even have the option of increasing your benefit by taking the Funeral Benefit Option.
There are many different life cover plans available. If you are not sure what type of life cover is right for you, then you should seek financial advice.
How much cover do you need as a couple?
To work out how much life insurance you need, think about your joint financial commitments.
- How much is your mortgage or rent?
- How much are your monthly bills and day-to-day expenses?
- Do you have children, and will they need help with education or childcare?
- Have you planned for funeral costs?
Generally, looking to get cover that is around 10 times your annual main income is a good place to start. You should review policies together to make sure there are no gaps.
Key points to remember
- Cohabiting couples don’t have the same automatic legal rights as married couples or civil partners. A cohabitation agreement or declaration of trust can help protect both partners and reduce uncertainty.
- Life insurance can help protect your partner and children from financial hardship if you die.
- Writing a life insurance policy in trust can speed up the payout and may reduce inheritance tax.
- There are different types of life insurance to suit different needs, including Over 50s Life Insurance, which offers guaranteed acceptance for eligible applicants.
No advice has been given by Shepherds Friendly and if you are in any doubt as to whether a life insurance plan is suited to your needs, then you should contact a financial adviser. There may be a charge for financial advice and the cost should be confirmed to you beforehand.
