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Can Unmarried Couples Get Life Insurance?

Life insurance can provide your family with financial support after you pass away. It is a smart financial strategy that many people with beneficiaries use to cover unexpected expenses or serve as inheritance money. Life insurance can pay off final costs, repay debts, replace income, pay taxes, or even go toward charitable contributions. Married couples often invest in life insurance to protect each surviving spouse. Today, more and more couples are living together and making important financial decision without getting married. One of these decisions is life insurance.

Who Can Receive Life Insurance Coverage?

Many people receive life insurance as an employment benefit. Others pay for their own life insurance policies to protect loved ones or to leave money behind. An individual does not have to be married to have life insurance, but if a person wants to give life insurance benefits to his unmarried partner, he must name this person in as the beneficiary. This is where the matter gets into a gray area.

It is not nearly as difficult to obtain life insurance as an unmarried couple today as was a decade ago. Unmarried couples must prove they have insurable interest. This means that the beneficiary must show he will suffer financial hardship as a result of the policyholder’s death. According to Arizona law, “insurable interest” for personal insurance also includes:

  • Love and affection, if two people are closely related by blood or by law.
  • A lawful and substantial economic interest in the safety and life of the individual, as opposed to the interest that would arise only by death.
  • One party’s contract for the purchase or sale of interest in a business partnership, or of stocks and bonds.
  • A charitable organization with a policy ownership interest in the life of the insured.

A common example of an unmarried couple trying to get life insurance is if both people work, make their own income, and pay bills together. Each partner depends on the other’s income, so if one partner were to pass away, the other would suffer financial hardship. This is proof of insurable interest. With this proof, an insurance company will allow an unmarried person to take out a life insurance policy with his partner as beneficiary.

Policyholder Classifications

Be careful in how you fill out your life insurance policy forms. Do not list that you’re married if you are not legally so, even if you cohabitate or have been together for many years. Life insurers have four different classifications for unmarried couples applying for coverage:

  1. Registered domestic partners. You need to register a legal agreement to receive this status, not simply cohabitate.
  2. Couples that live together. These couples are not registered domestic partners, but they do live together. In this case, you will need to prove insurable interests exist.
  3. Couples that don’t live together. If you are involved as a couple but do not cohabitate (and are not engaged), you may not meet the standards for proving insurable interest.
  4. Couples that are engaged. A couple engaged to be married is as good as actually married in the eyes of most insurance companies, regardless of cohabitation. As long as you’ve set the wedding date, insurance companies will typically treat your case as if you’re already married.

Your status as an unmarried couple is important to life insurance companies. Be completely honest about your relationship status and living situation. It may not be possible to get life insurance at this time, but the company may tell you when and if you can reapply – for example, if you become engaged, move in together, or can prove insurable interest.