Advisers and insurers must warn their cohabiting customers about the “potentially ruinous” risk of beneficial payments going to other people after the government rejected reforms to cohabitee rights.
Ruth Gilbert, partner at life cover consultants and campaigners Insuring Change, emphasised the need to close the knowledge gap about how claims payments for beneficiaries of cohabiting partners are made.
Gilbert spoke to Health & Protection following the government’s response to the Women and Equalities Committee’s report on the rights of cohabiting partners.
The Conservatives rejected the committee’s recommendations that intestacy rules which govern the division of an estate should be reformed to afford cohabitees some of the rights that married couples benefit from.
Gilbert told Health & Protection the government’s response was understandable in part but frustrating for those campaigners and their supporters who had been “trying for decades” to reduce the “potentially ruinous” risks unwittingly faced by cohabiting partners.
“As the proportion of couples who are living together without formalising their relationship continues its steady climb, confirmed in census figures out recently, the issues become more urgent,” she said.
“This includes those surrounding how life cover is set up without putting enough focus on processes and communication to ensure cohabiting partners can get the money intended for them.
“The government’s response leaves the onus on insurers and intermediaries to close the knowledge and risk gap the intestacy rules open up for cohabitants, who may only see the problem too late, when their life cover money disappears into the hands of others.”