Life Insurance For Your Partner: What You Need To Know

Life insurance is a contract between an insurer and a policyholder. The policyholder makes premium payments and is authorized to make changes, and the insurer pays a sum of money to named beneficiaries when the insured policyholder dies. It is possible to get life insurance on your girlfriend, but you will need her consent and to prove insurable interest, which means that you would face financial hardship if she were to pass away. Insurable interest can be proven through documents such as a lease with both your names, joint ownership of a home or business, or shared debts.

Consent and insurable interest are required

• Spousal or life partner relationship: Most spouses and life partners share financial obligations, making it easy to prove insurable interest. Former spouses may also have an insurable interest if there is shared custody of children.
• Parent-child relationship: If a parent relies on the financial support and care of an adult child, or vice versa, there is an insurable interest.
• Business relationships: An essential employee or business partner can be insured if their loss would financially impact the company.
• Siblings or other familial relationships: There may be insurable interest if a family member is providing caregiving or financial support.
• Creditor-debtor relationships: A lender may be able to prove insurable interest in a borrower if the debt is significant and the borrower's death would affect repayment.
• Non-working spouses: Their loss would result in a financial burden.

In the case of unmarried couples, establishing insurable interest may involve extra steps. However, the industry is becoming more flexible and adapting to modern relationships, making it easier to prove financial dependency. Examples of insurable interest for unmarried couples include:

• Both individuals being named on a lease
• Joint ownership of a home or business
• Shared debts like a car loan
• Having children together

It is important to note that even with consent and insurable interest, there may be challenges in getting life insurance for your partner. These challenges may arise if:

• You have only been dating for a short period.
• You don't live together.
• You're not financially dependent on each other.

Proving insurable interest

• Direct relationships: Insurable interest is typically recognised in direct relationships, such as a spouse or former spouse, children or grandchildren, and grandparents or grandchildren. In these cases, insurable interest is generally easy to prove based on the relationship status.
• Financial dependency: If you are financially dependent on your partner, you may need to show proof of this dependency to the life insurance carrier. Examples include both individuals being named on a lease, joint ownership of a home or business, shared debts, or having children together.
• Business partnerships: In a business context, insurable interest can be established if the company would experience financial hardship and loss upon the insured's death. For example, a business contract or other proof may be needed to show the financial impact of losing a key officer or partner in the business.
• Consent: While not always sufficient on its own, consent from the insured person is typically required in addition to proof of insurable interest. This can be given by signing the life insurance application or policy, or through a phone interview with the insurer.

It's important to note that insurable interest requirements may vary by state and insurer, so it's always best to consult with a legal or financial advisor to ensure compliance with any applicable regulations.

Naming your partner as beneficiary

Yes, you can get life insurance on your girlfriend, but only if you have her consent and insurable interest. Insurable interest means that you would face financial hardship if your partner were to pass away. In other words, if you depend on your girlfriend's income for essentials like rent or bills, then her death would significantly impact your finances.

The most straightforward way to secure your girlfriend's financial future is to purchase a life insurance policy on yourself and name her as the beneficiary. A beneficiary is the person or entity that receives the policy payout if the insured dies. By naming your girlfriend as the beneficiary, she will have direct access to the death benefit, which is usually tax-free and bypasses probate, allowing quicker access to funds.

There are several advantages to owning your policy and naming your girlfriend as the beneficiary:

• Control: You have control over your policy and can change beneficiaries, adjust coverage, and manage the policy as needed.
• Premium Payment: You are responsible for paying premiums, so you don't rely on anyone else to ensure the policy remains in force.
• Information Access: You will receive all communications about the policy.
• Payout: Your girlfriend will receive the death benefit directly, which is usually tax-free and faster than if the money goes through probate.
• Flexibility: Owning your policy allows you to adapt it to changing circumstances. If your relationship with your girlfriend changes, you can easily modify the beneficiary.
• Trust: Trust is crucial, regardless of who owns the policy. If your girlfriend owns a policy on you, she will need to manage it responsibly.

When naming your girlfriend as the beneficiary, be specific and provide as much information as possible, including her full legal name, mailing address, email, phone number, date of birth, and Social Security number. This will help the insurance company verify and locate your beneficiary, making it easier and faster for them to pay the benefits.

When partners are denied life insurance

While it is now easier for unmarried couples to get life insurance, there are still situations where a couple may find it difficult or even impossible to get life insurance policies for each other. Insurance carriers may deny your application if:

• You have only been dating for a short period of time.
• You don't live together.
• You're not financially dependent on each other.

Other Reasons for Being Denied Life Insurance

There are health-related and non-health-related reasons for being denied life insurance. The former includes:

• Diabetes
• Obesity
• Previous diagnosis of serious disease
• Smoking
• Failing a drug test

Non-health reasons for being denied life insurance include:

• Engaging in risky hobbies and behaviours, such as skydiving
• Having a history of DUIs or speeding tickets
• Having a dangerous job, such as roofing
• Having a criminal record
• Having a less-than-ideal financial history

Steps to Take if You're Denied Life Insurance

If you're denied life insurance, you can:

• Contact your financial professional and/or the insurer to check if a mistake was made on your application and to gain insight into why you were denied.
• Confirm the results. If poor health is the reason for denial, check with your physician to ensure there is cause for concern.
• Consider appealing the decision if you were denied based on incorrect or insufficient information.
• Apply with a different insurer, as every insurer has different criteria for approvals.
• Look into a workplace life insurance plan.
• Try again later. Use the waiting period to improve your health, quit smoking, clean up your driving record, and improve your finances.

Life insurance when you're engaged

If you're engaged, you can get life insurance on your partner, but you'll need their consent and to prove that you would suffer financial hardship if they were to pass away. This is called having an "insurable interest". Insurable interest can be verified through documents such as:

• A lease with both your names on it
• Joint ownership of a home or business
• Shared debts, such as a car loan
• Having children together

For engaged couples, it's generally simpler to get life insurance because insurance providers consider you to have a higher level of commitment and financial dependence. Some providers may ask about a wedding date, but it's not usually a requirement.

One option is for each partner to purchase an individual life insurance policy and name the other as the beneficiary. This provides flexibility and control over your policy, allowing you to adjust beneficiaries, coverage amounts and other details as needed. It also ensures that your partner will receive the death benefit directly, usually tax-free and without going through probate.

If you're thinking about getting life insurance for your partner, speak with a qualified life insurance agent who can explain your options based on your current life situation.

Frequently asked questions