New family structures – how are insurers responding to change?

The proliferation of different family situations

The family of today is multi-faceted and constantly changing. Although "traditional" families represent the majority of families with under-age children, the decline of marriage and the rising number of divorces (affecting more than one in three married couples) are leading to new family configurations.

According to INSEE (National Institute of Statistics and Economic Studies), approximately 70% of children live in a traditional family (a family consisting of a couple who are married, in a civil partnership, or living together as a cohabiting couple, and their children); 20% live in a single-parent family and 10% in a reconstituted family (following a second or even third union). In addition, the forms of conjugality are diversifying with the rise of non-marital cohabitation (approximately 25% of all couples), the growing number of civil unions and the opening up of marriage to all couples (source: INSEE – March 2016).

As a direct consequence of this proliferation of different family situations, insurers are striving to adapt their policies to the situations encountered by policyholders on a daily basis in order to cover all profiles of contemporary couples and families.

Personal accident cover – formulas adapted to suit every family

Personal accident cover insures against domestic and non-occupational accidents.

Insurers generally offer a choice of formulas adapted to every family situation: Single Adult (for people living alone), Couple (for childless couples who are married, in a civil partnership or living together as a cohabiting couple), Family (covering all members of the same family) and Child(ren) (for children only).

"Family" and "Child" formulas generally include school and extracurricular insurance, which covers civil liability for damage that children could inflict on third parties, as well as individual accident cover for any accidents that could befall the children themselves. In general, school insurance covers any children living permanently in the family home, irrespective of whether they are children of both spouses. However, coverage resulting from any insurance extension that may be taken out only covers the child who is specifically named in the policy.

For reconstituted families, the question of knowing whether their "Family" insurance covers children who live with the policyholder and the other parent on an alternating basis depends on the terms of their policy. The same applies to children born of a previous union of the policyholder's spouse or partner. The policyholder must therefore make sure that any children in alternating custody or those of his or her spouse/partner are expressly covered. The same applies in the event of any changes to the composition of the family.

Comprehensive home insurance – for people living permanently in the policyholder's home

Comprehensive home insurance policies are highly flexible policies designed to cover private individuals against the main non-occupational risks: civil liability, theft, fire, water damage, vandalism, etc.

Most civil liability coverage insures not just the policyholder but also the other people living permanently in his or her home: the spouse, cohabiting partner, children, etc. This is the general coverage provided in the policy that has been taken out, which defines the people in the family who are granted insured person status, on a case-by-case basis, because the definitions may vary from policy to policy.

For example, insured person status is often granted to a child (under-age or still in education) of at least one member of the couple, living in the family home, who is single, childless and considered to be dependent for tax purposes. On the other hand, a child who only occasionally stays in the home of one of the parents (e.g. at weekends and for half of the school holidays), and lives mainly with the other parent who has primary custody, shall be covered by the latter's insurance.

N.B. The majority of comprehensive home insurance policies include civil liability coverage for children of the household while they are participating in their school and extracurricular activities.

In addition to specifically priced comprehensive home insurance policies, other insurance solutions specially designed for single-parent or reconstituted families are available: 

• outstanding maintenance payment insurance
• spousal support insurance
• legal protection

Top-up health cover – adapted prices and coverage

Taking out top-up health (mutual) insurance allows beneficiaries to receive partial or total reimbursements for health expenditure not covered by the French Social Security system. In the context of a traditional family, anyone who takes out top-up health cover has the opportunity to include his or her spouse or partner and their children as beneficiaries, according to the provisions stipulated in the policy. In this way, everyone benefits from the same reimbursement guarantees.

This same principle applies to reconstituted families. One policy can cover all members of the new family. A spouse, a cohabiting partner bound by a civil partnership or a dependent child can be added to the policy simply by contacting one's insurer and sending off the required proofs. Certain family mutual insurance policies are advantageous for large families, with free subscriptions starting from the third dependent child and an identical level of coverage regardless of the number of children to be insured.

Some insurers offer specific mutual insurance policies with reduced subscriptions for single-parent families, which are designed for the reimbursement of medical expenses for a single adult and his or her children. These mutual insurance policies also provide higher levels of reimbursement for the most costly services (especially dental treatment, optical care and hospitalisation). N.B. Subject to their resources, low-income households may receive financial aid in order to obtain top-up health cover (ACS) in the form of a health cheque from the Social Security payable to a mutual insurance company.

Automobile insurance – what coverage for occasional drivers?

Car insurance covers the financial consequences of damage caused by the insured vehicle.

If the declared driver in the policy occasionally lends his or her car to a driver who is not named on the policy, the car remains insured even if there is no family relationship (e.g. when lent to the child of a new spouse) but an excess will generally be payable if the occasional driver causes an accident (this excess will be higher if he or she is a novice driver). On the other hand, if the stepchildren are designated as additional secondary drivers on the policy, no specific excess will be applied in the event of an at-fault accident.

Life insurance – pay attention to the wording of the beneficiary clause

Life insurance gives policyholders the freedom to choose the beneficiary (or beneficiaries) of the savings accrued in the policy upon their death. The beneficiary or beneficiaries just need to be specifically named in the policy.

The standard beneficiary clause in a life insurance policy, which by default is pre-printed in the policy, is often worded in the following manner: "I hereby designate the person(s) named below as the beneficiary or beneficiaries of the capital in my life insurance policy: my spouse unless legally separated, failing this my existing or future children, living or represented, in equal shares, or otherwise my heirs or beneficiaries". It may not be possible to adapt this clause to all family structures, and it must be worded differently by policyholders wishing to designate their cohabiting partner as the beneficiary, for example, or in reconstituted family situations.

If the policyholder has children from a previous union, they could be adversely affected by the application of the standard clause. Indeed, upon the policyholder's death, the spouse will receive the capital from the policy. Upon his or her death, this capital will not revert to the children born of the policyholder's previous union, as they are not heirs of the new spouse. This problem can be avoided by designating the policyholder's children as beneficiaries by name.