Four in 10 unmarried couples will lose out on their partner’s life insurance pay-out due to failing to have put the right arrangements in place, according to research from Scottish Widows.
The survey of 2,000 UK adults found 43% of people in unmarried relationships said their partner had made no plans to ensure they were legally entitled to their life insurance pay-out.
Only half of unmarried adults who were in relationships (52%) knew whether their partner had a life insurance policy, and a quarter of those who did know (27%) were unaware of the policy’s value.
More than a third of couples (34%) admitted they rarely discussed long-term financial planning because they saw it as unnecessary, awkward, or simply too difficult. This increased to 40% among over-55s.
The survey also uncovered a lack of awareness when it came to expectations and preparations needed to receive financial protection.
Among married people who lived with their partner, one in five (19%) would expect to receive a life insurance pay-out, despite fewer than one in seven (14%) knowing their partner had definitely put plans in place for this.
Married couples more clued-up
However, the research also showed that same-sex couples were more likely to discuss their finances.
While 24% of same-sex married couples discussed long-term finances monthly, only 18% of opposite-sex married couples do likewise.
In addition, 18% of same-sex married couples discuss long-term finances every two to three months, compared to 20% of opposite-sex married couples.
Consequently people in both married and unmarried same-sex couples were likely to know more about their partner’s finances than those in opposite-sex relationships. However, for all, levels of awareness were lower among couples who were not married.
Among married same-sex couples, 60% knew exactly how much their partner earned, compared to only 53% of people married to someone of the opposite sex.
The proportion of unmarried people who knew exactly how much their partner earns drops to 47% for same-sex couples and 45% for opposite-sex couples.
Rose St Louis, protection director at Scottish Widows, (pictured) said: “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. However, despite being difficult to discuss, there is an urgent need for transparency to ensure long-term security.
“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 advisors’ role in today’s society.”
