Special circumstances: divorce, cohabitation and blended families

In Switzerland, traditional families have a lot of protection. However, special circumstances such as divorce, cohabitation and blended families can cause major pension gaps, because these family models are at a disadvantage under AHV and accident insurance policies.

Cohabitation

Unmarried partners do not receive a pension in the event of death. Pension funds can also decide for themselves whether to pay a pension to cohabitating couples.

For example

Martin and Andrea are cohabiting. Andrea has three children from her first marriage, who live with them. If Andrea dies, the lump-sum death benefit will go to her children. Martin won't get a thing. It will be very difficult for him to continue servicing the mortgage on their jointly owned house. In order for them to be covered in the event one of them should die, they  must name each other as beneficiaries in their private pensions.

Good to know

You can also protect your unmarried partner financially by writing a will.  And, it is also possible for partners to name each other as beneficiaries in their pension fund so that, if one of them dies, the surviving partner will receive a pension.

Divorce

Surviving ex-spouses are only entitled to a pension on the death of their ex-wife or ex-husband if the marriage lasted at least ten years and if they were awarded a pension or lump-sum settlement in the divorce decree.

Blended families

In a blended family, neither the unmarried partner nor non-biological children receive survivors’ benefits in the event of death. The situation changes if the partners marry or adopt children from their partner’s previous relationships.

Closing gaps in pension cover through death benefits insurance

With your pillar 3, you can close the pension gaps that may arise in the event of death. One of the best solutions is a death benefits insurance policy. This means that the person named in the policy will be paid a lump-sum death benefit  if the policyholder dies. We also recommend writing a will.

Constant or decreasing insured sum

When you take out death benefits insurance, you can decide whether the insured sum should remain constant or decrease. A decreasing benefit means that the amount paid to the beneficiary decreases every year. This type of policy makes sense in many cases, for example:

• If the surviving partner will be able to work more as the children grow older
• If the financial protection offered under pillars 1 and 2  increases over time
• If you are also saving regularly through pillar 3a

Opting for the sum is a good choice if your risk is unlikely to change and you would still depend on receiving the full benefit in a few years time.