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The patchwork family model: Is everything in order insurance-wise?

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Does my new partnership affect my children’s insurance? And what do I need to think about in terms of insurance if my children only live with me at the weekend? When it comes to insurance, the patchwork family model has some pitfalls. 

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    Isabelle Näf

    Legal expert Isabelle Näf is a specialist in family and matrimonial law at AXA-ARAG. She explains what patchwork families need to think about if they want to ensure that they are well covered and have made adequate provision.

Which types of insurance is it imperative for a patchwork family to have?

We recommend that patchwork families have the usual types of insurance: household contents, liability, supplementary health insurance such as dental insurance and, for self-employed parents, occupational disability insurance. In addition to a will, we recommend taking out life insurance to cover the patchwork family. This allows policyholders to determine who benefits in the event of their death – and to what extent.

What do patchwork families need to think about if they want to ensure that they are neither under- nor over-insured?

We advise patchwork families to check who is insured under all their insurance policies: many have terms and conditions stating that the policy insures one “family” in a shared residence. A child from an earlier relationship whose main residence is with the other parent may have to be added to the policy or, ideally, is fully covered by the insurance policy of the other parent. As a safeguard, it is important to check whether each member of the patchwork family is covered by one of the existing policies or whether a supplementary policy needs to be taken out.

Can you give three typical examples of pitfalls that patchwork families should bear in mind in relation to insurance? 

Many patchwork families are only aware of the options for designating beneficiaries in a will. Under Pillars 2 and 3, however, there are likewise various coverage options, which many of those concerned are unaware of. Each pension fund has its own regulations and therefore the arrangements for beneficiaries in the event of death also differ. 

When households join, it is vital to review the sums insured. This safeguard ensures that any new items brought to the household – such as televisions, clothes, music systems and cellphones – are also covered. In any case, it is advisable to review the current situation and sums insured and make any necessary adjustments every three years at the latest.

Dental insurance for one’s own children is another issue. In this case, it is necessary to take out insurance when the children are still very young, as there are no known previous diseases or misalignments at this stage. Once a dental insurance policy has been taken out, it should not be canceled and taken out anew in the event of a separation. Otherwise, there is a risk that any new or existing diseases or known dental misalignments at that time will be regarded as pre-existing.

Many patchwork families are only aware of the options for designating beneficiaries in a will. Under Pillar 2 and Pillar 3a, however, a different framework applies, which those concerned are mostly unaware of.

What is it necessary to think about if the couple are not married?

If the couple remain unmarried, it is advisable to clarify the issue of pension provision at an early stage. With each of the three models – AHV/AVS, BVG/OPA, and private pension provision – there are different points to bear in mind. 

AHV/AVS (Pillar 1): Unmarried couples earn their AHV pension on their own and independently of the partnership. In the event of death, cohabiting couples are not entitled to a widow’s or widower’s pension as is the case with married couples. Therefore, it should be ensured that end-to-end AHV contributions are made for both. As soon as one parent neglects their own provision in favor of staying at home and looking after children, the working parent should be supportive and take over the contributions. Ideally any gaps that arise through looking after children are covered by AHV education credits.

BVG/OPA (Pillar 2): Unlike for married couples, the pension fund assets accrued during unmarried couples’ time together are not divided upon separation. Only upon death are BVG benefits possible for the surviving partner, but there is still no legal entitlement. Pension funds that grant partner’s pensions often link these to a specific cohabitation period or care for joint children. To cover themselves for this situation, the partners should register the partnership with the pension fund at an early stage. A cohabitation agreement can also be drawn up at an early stage and used as evidence if necessary. Subject to certain conditions, many pension funds also pay a pension to surviving stepchildren and foster children. Here, it is important to clarify the respective conditions and to designate one another as beneficiaries. 

Pillar 3: As described above, Pillars 1 and 2 are not entirely suitable for covering life partnerships in the event of death. In this case, we recommend a pension consultation, where an optimal, individual solution can be found together. Overall the following can be said: for tax-efficient tied Pillar 3a pension provision, there is a statutory prescribed sequence, under which biological children come first in the case of unmarried individuals. Only then do the partner and other family members follow. To provide clarity in the event of death, the order of beneficiaries and therefore succession for 3a capital should already be defined with your pension institution during your lifetime. Pension provision with flexible Pillar 3b is particularly suitable for cohabiting couples. Whether savings, bank accounts, life insurance, bonds, money market investments, shares, securities funds, or property – all options can be used to protect one another financially, as the order of beneficiaries can be chosen freely, with the exception of the statutory compulsory portions. The type and amount must be documented in the beneficiary clause, which is communicated to the insurer in writing. It is also useful to set it all out in a will.

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How does a patchwork family protect itself in the event of separation? 

It is advisable to have a cohabitation agreement to protect unmarried couples. This should specify the following:

  • What belongs to whom (inventory)
  • When buying a house: co-ownership, financial contributions
  • Who stays in the shared home following the separation and which notice periods apply
  • How the household costs are shared
  • Monthly maintenance contributions to be paid by the wealthier partner after separation
  • Maintenance contributions for children
  • Child custody, residence, and visitation rights
  • How the assets are to be divided and how losses on social security and pensions are to be offset


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What is it important to bear in mind in the event of death or disability?

For the eventuality of death, it is advisable to draw up a will in which not just the biological children but also the life partner and their children, if any, are taken into account. However, since biological children always receive a fixed mandatory portion of an inheritance, only a small portion of the assets can be bequeathed freely. It is possible, though, for the biological children to consent to an inheritance (renunciation) agreement and the inheritance to therefore be distributed among all the parties chosen by the deceased. As mentioned above, it is advisable to take out life insurance.

If a partner suffers an accident or occupational disability, occupational disability insurance ensures that the family can maintain its existing standard of living. 

As regards all other types of insurance, the existing policies should be checked and changed in line with the new circumstances in the event of separation or death.

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