A friend of mine’s estranged husband died earlier this summer after a short illness. They never divorced and had two children.

While he did not have additional life insurance, she has received a modest death-in-service benefit from his employer, a state widow’s pension and she will now rent the small house he bought a couple of years ago which is mortgage clear due to the compulsory mortgage protection insurance.

“We left each other as beneficiaries in our wills for the children’s sake,” she said.

“It (the inheritance) isn’t a lot of money, but between the rent and my widow’s pension it should just about match the maintenance payments he was paying me for the children. The death benefit will help pay off this mortgage [on their original family home.]

“Just as well we got married when the eldest arrived,” she added, “it could have been worse.”

What she meant is that during the years when they co-habited, she (or he) would not have been automatically entitled to claim a death-in-service benefit or any other life insurance if one of them had died, let alone a widow(er)s pension.

As for inheriting the property, if the residence in which they were both living was owned by only one partner, the other might have been entitled to inherit it tax-free in recent years.

This would be in line with the inheritance tax exemption for people who have lived with the owner (i.e. cohabiting couples, siblings, adult children or friends), but only if certain conditions were met – three continuous years living together, no ownership stake in any other property, a restriction on the sale of the property for several years after the inheritance.

Co-habiting couples who have children are in a different position, in that the children are automatically entitled to a portion of their father’s estate – in this case his property and insurance.

But the ex-partner, their mother, is not and while she will usually act as guardian for the children, she may have no entitlements personally from his estate.

I was thinking of my friend last week after reading an interesting survey that Hibernian Aviva Life & Pensions has just published about the financial security of co-habiting couples.

Representing almost 12 per cent of all families – a significant minority- and one that is growing every year, Hibernian found that:

* 45 per cent of Ireland’s cohabiting couples rely on the income of both partners

* 40 per cent “would have serious financial problems if one of them became seriously ill and was left with only one income to rely on”

* 25 per cent admit they would be left with a serious financial problem if one of them died unexpectedly.

The study states: “Interestingly, cohabiting couples under 35 are even less likely to financially cope if an unexpected illness or disability strikes”, with 46 per cent saying they would suffer serious financial problems if one of them became seriously ill.”

A quarter of this age group also reported that they would be left with serious financial problems in one of them died.

The conclusion that the under 35s could be the most effected by an illness or death of the other partner shouldn’t really come as a surprise to anyone,


Not only has this age group taken on huge personal debt during the heyday of the Celtic Tiger in the form of mortgages (that may be negative equity), car loans and credit cards, but they’re also the age group that has been hardest hit by the recession.

Which makes the solution – ensuring that they have adequate health insurance, income protection and life insurance (either at their place of employment or individually) so problematic when their ability to pay has never been so precarious.

A free, useful guide ‘The Facts of Life’, giving the facts about this kind of insurance can be downloaded at www.hibernianaviva.ie or speak to your broker who can compare products on the market for you.

In one sense my friend was lucky that no financial crisis happened during the years she was a co-habitee.

Even after her separation, the legal safety of their marriage was still in place; during their long separation they had certain financial arrangements which also provided some security.

But this survey also discovered that “a staggering 72 per cent of divorced or separated couples admit to not discussing the need to safeguard spouse and child maintenance payments in the event of death.”

Another 42 per cent of families admit they don’t have sufficient life insurance in place, and 52 per cent of families would have to rely on savings “to try and replace lost income if the main income earner became ill or disabled”.

The recession is going to make it increasingly tough to make financial ends meet, but this survey shows that not making any provision to protect your family, could be even more difficult.

A good broker or financial advisor should be able to help you find some kind of affordable solution.


Jill Kerby welcomes reader’s letters. Please write to her via The Munster Express, 37, The Quay, Waterford or directly at jmkerby@indigo.ie