HSBC - Naming Beneficiary Outside The Box

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. 

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.

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.”