HSBC to allow same-sex, unmarried couples to be insurance beneficiaries

Same-sex or unmarried heterosexual couples can now be named as beneficiaries in life insurance policies sold by HSBC Insurance – a breakthrough policy, it said on Thursday, much more in line with today’s modern society. 

The expansion also allows grandparents to buy policies for grandchildren, or step-parents for their stepchildren, in a series of moves that the insurance offshoot of the lender said will make life so much easier for customers wanting to buy policies for those with whom they have no legal or blood relationship.

HSBC’s general insurance partner AXA has already made similar changes to its medical and travel insurance policies.

“The changes we are making reflect a need for greater clarity and transparency in addressing new customer needs as a result of a broader range of committed and familial relationships in society today,” said Edward Moncreiffe, chief executive of HSBC Insurance. 

“This is the right thing to do. Society is evolving. New and varied family dynamics and relationships are redefining who people are closest to, and thus the nature of financial dependency.”

Until now, Hong Kong’s life insurance industry had limited beneficiaries to relationships by law or blood upon application, with a change in beneficiary without such linkage only allowed after a policy has been issued. 

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As a result, same-sex couples or unmarried heterosexual couples could not directly name their partners as beneficiaries. 

When people first bought a policy they had to name their brothers, sisters or children as beneficiaries, but those could be changed later, too.

Likewise, when grandparents wanted to buy a life policy to pass on a legacy to their grandchildren, they would first need to name their children or spouse as beneficiaries, and then change the names to the grandchildren later. Similar procedures apply for step-parents with step children.

HSBC figures show 600 changes of beneficiary requests were made monthly last year, but HSBC Insurance could not confirm the breakdown of reasons.

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The insurer said, however, it did believe the expansion of the beneficiary list will vastly reduce such troubles often faced by customers. 

“Grandparents, for instance, may wish to leave their grandchildren a legacy,” added Moncreiffe.

“Couples in modern relationships will naturally want to protect those with whom they share their financial burdens.  

“Blended families often now mean we become responsible for family members who are not related to us by blood.”

Hong Kong Federation of Insurers (HKFI), the industry’s body in the city, said different insurers have their own guidelines on how to define their beneficiaries.

“Some policyholders assign their churches as beneficiaries, but the HSBC announcement is a new way to present the idea of inclusiveness,” said a spokeswoman from HKFI.

A veteran insurance company executive, who did not want to be named, said HSBC was so far the first to declare a standard policy on inclusion of beneficiaries for same-sex couples and other relationships without a blood or legal link upon application.

This was because many insurance companies are still worried about legal disputes, as Hong Kong law does not accept same sex marriage.

A spokeswoman for regional insurance group FWD said it allows policyholders to decide on their own beneficiaries upon application.