Married or not, here’s what every live-in couple should know about sharing expenses

Over the past year, global feminist movements have taken centre stage, particularly the #metoo and #timesup activist campaigns with the latter being a big focus at the Golden Globes, where influential women wore black to show solidarity against harassment and assault. Many also voiced their opinions on gender inequality in the workplace during their red carpet interviews. These global movements have reportedly resulted in 48% of companies reviewing their employee pay policies.

 

In South Africa, women are not exempt from the impact of financial inequality and could be affected even further if they share finances and insurance policies with their live-in partner.

 

“This is unless they proactively put binding agreements in place,” says industry expert, Vera Nagtegaal, the Executive Head of Hippo.co.za. “Women should take simple steps to reduce their financial risk in the event of a breakup. It starts with a frank conversation about shared financial responsibilities and insurance cover.”

 

Nagtegaal says that it is vital for couples to know what protections are offered by their insurance policies. “This is particularly relevant for modern day couples opting to cohabitate rather than get married.”

 

Nagtegaal explains that having a conversation about shared finances is particularly important for women who are not sole breadwinners because they tend to be at greater financial risk – largely as a result of inequality in the workplace, and the role many women play at home. “In South Africa, the gender pay gap is estimated at around 15% to 17%. Being a stay-at-home parent or scaling back on work commitments to spend more time with the children will also impact a person’s income.”

 

“This means that women, or whoever the stay-at-home parent might be, are likely to work and earn less,” she says. “For this reason, they should seriously consider entering into what’s called a ‘cohabitation agreement’ with their partners to cover the eventualities of what might happen should the relationship come to an end.”

 

“How insurance policies are managed should ideally be covered in the cohabitation agreement. This is to avoid finding yourself in a situation where the policy has been terminated without consultation.”

 

“For example, you might assume that your partner has continued to pay a life insurance policy, or a dread disease and disability policy, when in fact, cover has been cancelled,” says Nagtegaal. “Should any insurable event occur, you might be very surprised to discover that your financial position has been compromised.”

 

The same applies to other forms of insurance, including household and motor vehicle insurance, she adds.

 

“Even with a cohabitation agreement in place, couples should check that their insurance policies are still active, up-to-date and provide sufficient cover,” says Nagtegaal. “Not only should a cohabitation agreement cover who is responsible for the insurance, but it should cover what needs to be done if one party wants to cancel it.”

 

While these conversations can be tough, the purpose of insurance is to take care of people in the worst-case scenario, says Nagtegaal. “You need to own your financial decisions. Assuming that someone else is taking care of it is the worst mistake any individual – male or female – can make. Own the responsibility as well as your financial freedom.”


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