Life Insurance for Unmarried Couples

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So, like me, I assume you’re one of the over 51 million households in the US that are headed by unmarried couples? If you don’t live together there’s still hope-read on. First off, I’m happy you’re financially responsible & savvy enough to be thinking about this! Life insurance is meant to protect your loved ones from being in financial distress after if you pass away. Your loved ones are certainly not limited to your parents, siblings, children, or marriage partner. However, when it comes to all the legal mumbo jumbo that is written in life insurance contracts….we need to understand where your rights are defined as an unmarried couple.

The first thing to understand about a life insurance contract and how it works is by understanding some basic yet key terminology. Then we can grasp how it’s possible to obtain life insurance for unmarried couples.

Basic Principles about a Life Insurance Contract

  1. Named Insured: This is the person who is insured by the life insurance company.
  • Beneficiary: This is the person who will receive the death benefit if the named insured passes away. There can be more than one beneficiary for each type [ Primary or Secondary Beneficiary]. Also, there does not need to be more than one beneficiary unless the you want there to be. However, since this is an article about life insurance for unmarried couples…I’ll focus on the task at hand.

Primary Beneficiary: The life insurance check goes firstly to the (you guessed it) the Primary Beneficiary. Typically, unmarried couples will both list each other as the Primary Beneficiary.

Secondary Beneficiary: This person will receive the life insurance check if both the named insured and the Primary Beneficiary both pass way. This can be children (typically need to be 18 or older), a trust, or whoever the caretaker of the children would be if both parties pass way.

  • Insurable Interest: Will you suffer financially if your partner passes away? I assume so, otherwise why would you be looking for life insurance on your significant other.
  • Death Benefit or Face Value: This is the total amount of life insurance. Term life insurance policies for unmarried couples will typically start at $50,000 and can go up to $3 million with relative ease. Anything over $3 million typically requires a ton of more work (financial statements, EKG’s, MRI’s, etc).
  • Term or Length of Life Insurance Contract: The two most common types of life insurance contracts are term and whole life insurance. Term life insurance expires at the end of its term (hence the name). The typically term options are 10, 15, 20, 25, and 30 year term contracts. Whole life insurance policies go up to age 100 or higher. The whole life insurance policies typically do not have an expiration date but are substantially higher priced.

True Story:  I’ve personally insured many unmarried couples, so I know that it’s not only possible, but common. I’m 35 years old and have never been married before. I do have an 8 year old daughter who I absolutely adore, named Amora (Amor means Love in Spanish and we added an A to make it sound more feminine). The first time I got life insurance was when my new family was in the hospital’s waiting room, the day she was born. I never really thought about life insurance before that. Funny how holding your baby completely changes your mindset! I started thinking of everything bad that can happen on the drive home…what if a drunk driver hits me and I die? What if some lunatic randomly shoots his gun and I get shot in the head and die. What if I have a heart attack-I’ve been eating a lot of fast food lately and been under a lot of stress with no sleep, and on and on until I called life insurance company I found on Google. They offered instant no medical exam life insurance (ask your agent about this). After about half an hour, he gave me the relief I needed from my self-imposed panic attack-I was covered for $500,000!!! I asked the agent “so just to clarify and verify if I pass away right now-my “wife” or significant other (I might have even used domestic partner as that’s what she did at work for health insurance purposes) will receive $500,000, is that correct?” The agent said “Yes” and so I proceeded to thank him, requested the policy via email, and then went home finally. Whew! I was insured. I hope to make your process of shopping for life insurance that easy, easier, and/or more enjoyable!

Now that you understand the basics of a life insurance contract. Let’s get down to the nitty gritty of obtaining a life insurance policy/contract on your significant other!

Step by Step Guide

  1. Insurable Interest: To obtain a life insurance policy on your significant other we need to prove insurable interest. Will they suffer financially from your death? If so, how will it cause you economic distress. For instance, in my case, it as easy as I was the primary breadwinner of the household. Therefore, if I died, she would be left with literally nothing…but debt (including my funeral!). We lived together so it was easy to “prove” insurable interest. We actually didn’t need to prove anything with documents. Some life insurance companies require you both to be on a written “lease agreement” or to be on a mortgage as co-mortgagers. However, not all of them do. Also, some life insurance companies have on the drop-down menu (when defining the primary beneficiary relationship) “significant other”, “fiancé”, “life partner”, and few other awesome descriptions! I even once put down on one of my client’s applications, “soul mate” since they didn’t have an awesome description and they were not engaged..we made our own awesome description and proceeded to insure them both 😊 We just laid down the proper foundation so the underwriters had no questions or issue with it. Our experienced agents will help guide you in selecting a “unmarried couple friendly” life insurance company! There are many so don’t despair! You’ve come to the right place 😊

Legal detective stuff: Sometimes, albeit rarely, even the “unmarried couple friendly” life insurance companies require some sort of proof. Here are common verification methods that have worked in the past:

Utility Bill: If you two live together but only one is on the lease. This is pretty easy to obtain in the majority of cases. However, if for some reason you can’t obtain this or you have a “utilities included” rental agreement… then you can use the some of the other “legal” documents.

Cell phone/Cable/Internet bill: Whether you have a prepaid plan or whatever. The monthly statement will have the names and address on it.

Bank Statement: Do you two have a joint bank account somewhere? This also has the names and address which has been sufficient in the past for me to insure unmarried couples.

Auto loan or lease: Are you co-signors on an auto lease or loan? If so, then this shows insurable interest for at least the amount of the loan! Also it should have the name of both “parties” you and your significant other.

Any other debt or contract together: Did you two sign-up for financing or some contract together elsewhere? The most common types I’ve seen are at furniture stores, home depot, credit card, motorcycle and/or boat loans, business loans, registering a business together, etc.

Auto/Motorcycle/Boat Insurance Policies: Are you two on the same auto insurance policy? The declaration’s page (you can ask you insurance company for it if you don’t have it) is an official insurance document that typically is one of the first three pages of the actual insurance contract. It states the named insured(s) and will also have the address.

As you can see there are many ways to prove that you two live together if you both aren’t on the lease or mortgage contract. If you don’t live with one another, you can still have some insurable interest if you have debt together. The other common justification is children. Do you two have children together?

Death Benefit Amount: $50,000-$3,000,000 is most common range for unmarried couples. The amount needs to be legally justified as well. This shows insurable interest. Let me show you what I mean.

Unmarried couples without children: The death benefit will be generally be calculated by assets, debts, and “income replacement”. The income replacement typically is what guides this amount. Does your significant other make $50,000 annual income? Then we use this as a starting block and use it as a “multiple”. The higher the amount the more insurable interest a life insurance company needs.

Unmarried couples with children under age 18: As a starting point you would multiply your significant other’s annual salary by however long it takes for your youngest to reach the age of 18.

                Example: Your significant other’s annual salary is $50,000 and you have 3 kids with the youngest being 2 years old. That means you have 16 years left until your youngest is 18 years old. Therefore, you would multiple $50,000 by 16 which equals $800,000. This is a good starting point on how much life insurance coverage you might need. Every situation is different so talk to your agent to iron out the details.

Unmarried couples expecting: You would use the same calculation as unmarried couples with children. Your baby is 0 years old so you would multiply your significant other’s annual income by 18. So if they make $50,000 that would be $50,000 x 18 = $900,000 as a good starting point. Again your agent will iron out the details during the consultation.

Term length: This really depends on many factors. We typically want insurance for as long as we think we need it. Will you be financially set in 10, 15, 20, 25, or 30 years? How long until you can self-insure with assets and net worth and no longer need life insurance? If unsure, talk to your agent. This is the easy part of the whole process. Some insurance is better than none! Also, remember that you can always get more life insurance in the future. However, it’s typically recommended to get life insurance while you’re young and healthy. Life insurance premiums go up each year as you age so keep that in mind. Also, who knows you might develop diabetes, high blood pressure, sleep apnea, or some other medical ailment which will increase your life insurance premiums. Although there are “niche” life insurance carriers for each situation really.

Formula for getting life insurance for unmarried couples

Prove Insurable Interest > Determine Death Benefit > Choose Term > Choose Insurance Carrier/Company

I hope the above helps on your journey to protect yourself! If you have any questions whatsoever, please email us and one of our agents will be happy to assist.



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