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How to Discuss Life Insurance With Your Partner

Why discussing life insurance with your partner can be difficult

I know what you’re thinking: A conversation about life insurance is either going to be boring or unpleasant or both. And besides who wants to spend time thinking about things like death or cancer? Shouldn’t we be thinking of happier things?

It’s a fair question, but life insurance, and discussing life insurance with your partner, is one of the fundamentals of good financial planning. There’s no point working and saving and investing to provide for your each other and your family if one accident can take it all away.

According to this article in FT Adviser, the recent Covid-19 pandemic has led almost six million people to consider life insurance. For some this will be the first time they have thought about it.

https://www.ftadviser.com/protection/2021/06/25/pandemic-prompts-5-8m-adults-to-consider-life-insurance/

Starting the conversation can be the hardest part. Life is full of distractions so actually getting together and having that discussion can be real challenge.

Here are some of the reasons couples might put off this important conversation.

Table of Contents

There's no time to discuss insurance

We’re all busy. Naturally when the day is done, and you finally get to spend time with your partner you want to relax and talk about more pleasant things. Few after-dinner conversations begin with “So babe, what plans have you made in case I die?”

Finding time in our busy lives to sit and discuss questions of life insurance is never easy but getting the ball rolling can be the biggest hurdle. Not only will an impartial expert be able to explain and discuss your options, but they will also take over the whole process, and be able to remind you of the steps you need to take from gathering information to getting the forms submitted on time.

One last tip – don’t make this a surprise conversation. Springing this on your partner can be jarring and it could make them feel unprepared, and unengaged. Instead, plan a time to sit down and talk about it, step by step.

Insurance is too expensive, we can't afford it

Everything has a cost, and financial pressures only seem to increase, so who wants to spend even more money on something as intangible as a life insurance policy? There are other, very present, bills to pay today. Why spend money on something which might never happen?

Of course, what you should be talking about is what money will you need if someone dies, and how will you get it.

We’ve had more than one conversation with a client who say things like “Oh, if my partner dies, I’ll sell the house and move.” That sounds easy on paper, but if you have ever bought or sold a house you know how stressful that can be. Now imaging doing that not becuase you want to, but because you need to, because you can’t afford to live there anymore. And now imagine doing all that alone.

The right life insurance can make this unnecessary, ether by paying the monthly mortgage costs or clearing the mortgage entirely. Then you can sell the house if you want to, but on your terms, and when you’re ready.

No one enjoys talking about death

Facing up to the reality of the need for insurance can take an emotional toll. For some of us, even the thought that the person we love and rely on could die is too much. Others may have already gone through this experience and don’t want to relieve it.

there’s another emotional point to consider too. The emotional element doesn’t necessarily mean imagining the pain of loss too much. Empathy in relationships means understanding how the other person might feel. The emotional reluctance of protection planning can be because we don’t see the need, as much as not wanting to think about the need.

As you can see it’s easy for life insurance conversations to be all about the negative but focussing on the positives of a discussion around life insurance can be helpful.

Good planning is an expression of this care.  It means doing things the right way now so you can keep looking after your partner if you’re no longer around.

Going to work every day to pay the mortgage to make sure your family has a home is a responsible, caring act. You don’t want them to be homeless, after all.

Making sure the correct mortgage insurance is in place so that even if you’re not able to pay for it, either through illness or accident, temporarily or permanently, is also an act of care.

Insurance is fundamentally an emotional subject, but this is one of those times where sticking to the facts and the risks can bring clarity and impartiality to your conversations.

You don't want to discuss a potentially embarrassing medical history

Life insurance means medical underwriting, and this means revealing facts about ourselves we might prefer to keep secret. It could be as simple as something like our weight, or an embarrassing medical condition we dont want to bring up.

These are the reasons you should be looking at life insurance. If you are already aware that your medical history can raise some questions, then you should make sure the right policy is in place to answer those questions.

You don't understand the risks

This might be one of the biggest reasons couples don’t discuss life insurance, they simply don’t understand the risks involved.

There’s two ways to think about risk. The chance that something might happen, and the outcome if that event happens. Getting struck by lightning would be extremely unlikely, but very serious if it did happen. Dropping your phone is much more likely to happen, but far less serious.

Life insurance can be more likely than we think and have more serious implications than we think. for example, around one in three people will suffer from a serious illness and survive it before the age of 65. (Most likely a form of cancer or a heart condition.)
What does that mean for your ability to work, and therefore to pay your bills. Maybe you have an understanding employer. Maybe you work for yourself. Does this make a difference? And how will this added financial pressure affect your relationship?

You don't understand the insurance products

We’ve created more detailed pages about the different types of life insurance and protection available here, but here is a brief introduction to the main types of cover available. In most cases there are several types available, suitable for different risks, such as your family income, your mortgage, or your business. There’s also additional options to protect against inflation, or provide renewable options etc.

Life insurance

These products pay out their sum assured (the plan value) when you die. 

Critical illness cover

Pays out on the diagnosis and survival (that bit’s important) of a defined medical condition, such as cancer or a heart attack.

Income Protection

Pays a portion of your salary if you are unable to work due to accident or illness.

Medical insurance

Covers the cost of private medical treatment and tests.

You think the policy will never pay out

This is a real concern for many people, and to be fair it is largely once caused by the insurance industry, although this has changed significantly in recent years.

There are two main reasons why a claim might be declined. One is non-disclosure, and the other is the claim not meeting the definitions of the policy.

Non-disclosure of material facts

This starts with the application form. Some applicants do misrepresent themselves, and it is fair for these polices to be declined because they were obtained under false pretences. However, many times these are simple errors, and the changes might not even make a materiel difference to the application.

Not meeting the definitions of a valid claim

Life insurance is pretty simple, and death is generally easily diagnosed, but policies like critical illness cover rely on medical definitions that are incomprehensible to most of us. (i.e., when is a heart attack not a heart attack?) It’s cases like these that have caused a lot of the bad press for the insurance companies.

These days, most life insurance companies provide detailed annual reports showing how many claims they pay, and what is the most common causes etc. This information has led to better outcomes as marketing departments need good figures to make their company’s plans more attractive than the competition.

There’s still some element of risk when it comes to medical definitions, but of course if your policy didn’t pay out it doesn’t end. You still have it available for future claims.

These days, most life insurance companies provide detailed annual reports showing how many claims they pay, and what is the most common causes etc. This information has led to better outcomes as marketing departments need good figures to make their company’s plans more attractive than the competition.

There’s still some element of risk when it comes to medical definitions, but of course if your policy didn’t pay out it doesn’t end. You still have it available for future claims.

Why talking to an independent adviser can help

Having an adviser present can be a real help, especially if they have experience in coaching. Discussing the need for life insurance can be highly emotive for everyone involved because at the heart of it is the unwelcome truth that the person you want to depend on most might not always be there for you. It means having a serious think about what life would be like without the person you rely on. It means thinking about life alone.

For some couples this conversation can be a cause of conflict too, as they may come to the discussion with different ideas of risk. One might not see the need for insurance. Another couple might disagree on the type of insurance. Another might argue over the cost.

Often these discussions will be about the number and nothing more, but money is more than numbers. Our relationship with money is as much emotional as it is logical.

Money is so essential to our lives and can be the cause of so much stress that the obvious need for insurance can be lost in the noise even though the freedom and protection insurance represents should be obvious.

Having an adviser present during these discussions can be helpful to steer the conversation in the right direction, to raise and answer objections, and be the one to ask the difficult questions.

There are some things that it can be hard to talk about – an adviser can be the independent third party to prompt and investigate things that might cause anxiety for couple. Questions from one partner to the other could cause them to become defensive (“Why didn’t you tell me this?”) or withdrawn or angry due to feelings of failure, or lack of preparation, or ignorance of the financial risk, or letting the partner down with planning ahead.

These questions also force us to consider our own mortality.

We all know that on one level we won’t live forever but having to really face up to what that means for ourselves, and the people we care for, can be very challenging.

It’s true that discussing life insurance with your partner may not be an easy conversation.

It’s also true that the need for life insurance might never arise, but do you want to take that chance? Surely it’s better to have it and not need it, than need it and not have it.

Insurance is about managing risk, but there are no sure things.

But consider the alternative possibility which is one that people face every day.

  • If you die, do you want to leave your partner alone and unprepared?
  • If you survive, do you want to worry about where the money will come from?

Practical tips to discuss life insurance with your partner

1) Understand your obligations

Life insurance is a catch-all term for death, medical, health and income insurance. If you know what your financial commitments are you can prioritise the cover you need over the cover that is nice to have.

2) Understand the insurance you already have

Do you have life cover provided by your employer, or personal pension plans? What about other savings? Matching these figures to your potential costs might mean you need less insurance than you think.

3) Now look at the gaps

Do you have a £200k mortgage but only £100k in cover from your job? Then you only need £100k cover to make sure the mortgage is cleared. This stage is called your shortfall or gap analysis.

Don’t forget that if you change jobs your benefits could change too, so don’t get caught short. That’s why it’s good to have independent policies that are not dependent on your employer.

4) Play ‘what-if’ to understand the risks

What if…
  • one of you died.
  • a child was ill?
  • you couldn’t work.
  • you lost your income for six months? Twelve months? Two years?

Seriously work through these questions together. You may discover that the answer could be ‘no big deal’, but other times the answer will be a big deal and you will need to take action to fix it.

Ideally you should speak to an independent firm who will be able to mix and match recommendations from the whole of the market. They will also be able to thoroughly review your circumstances to make sure you get the cover you need, and not what a bank wants to sell you.

5) Don’t let the perfect be the enemy of the good

No financial plan is perfect because we simply can’t afford to do all the things we know we should.

Some insurance is better than no insurance, as long as it helps to meet your needs.

An example I always use is the value of Critical Illness insurance. This is around four times more expensive than normal life insurance so the cost can quickly put people off. But having some critical illness cover is better than none.

Maybe taking out enough cover to clear your mortgage is too expensive. But how much would it cost to pay your mortgage for a couple of years? It’s better than being forced to sell your home.

Even a small amount of cover can be life-changing.

A final word

Don’t think of insurance in negative terms, as planning for the worst.

It’s about identifying risks and making someone else responsible for it.

It’s about protecting and preserving what you love most.

If you want to discuss any of the issues raised here, then give us a call or send us an email. We are a fully independent financial advice firm, and we will only ever recommend a policy to you if we believe it will help your reach or protect your financial goals.

Peter Dixon

Peter Dixon

I'm the Practice Manager at BBi Financial Planning. If you want to talk about any of the points raised here please get in touch.