LadyP, I was on FLR when my husband passed away. It was quite terrifying for awhile as I was unsure if I would be able to stay in the UK in our home or not. It took about four months to receive my ILR and even though I had plenty of reassurances here, the fact is, until you have that ILR in hand, you tend to doubt.
I sent in the application and my passport right after his death. Prior to that, I was a stay at home full time care giver for my husband. I have never held a job in the UK. Fortunately, he left me enough money to get by on for awhile, as with my passport gone, I could not look for work.
The application itself was very simple. I did not have to submit any financial info or work history. All I had to show was that the relationship was subsisting at the time of his death and his death certificate.
I now have to have 5 years of residency as weby pointed out. That really sucks. I was initially eligible for naturalisation in April of 2011.
If your partner has paid NI contributions, a widow should be entitled to widow benefits as this is not considered public funds, so even if you don't have your ILR yet, you are still entitled to this payment. You are also entitled to a lump sum for funeral costs.
It's beneficial to know that any bank accounts or credit cards in the name of the deceased will be closed. It is your duty to present the death certificate to all interested parties in order to facilitate this. My husband had his own bank account which was closed. Luckily, we also had a shared account. They left this account alone, with the exception of removing his name. As long as the deceased's debts are satisfied, the remaining money will go to the surviving spouse. If there are debts in the deceased's name which can not be satisfied, they will be wiped away.
It is important to know that this info does NOT apply to those on a fiance visa, as that is a temporary status. You do not get automatic ILR if your partner dies while on this visa. You might very well have to leave the country in this case.
This application can now be done through the post OR in person processing at a PEO.
WebyJ, it may have changed since I applied, but I was told that a set (O) based on bereaved spouse was not a straightforward app and HAD to apply by mail. I really wished I had been able to apply in person as the waiting was tortuous