3a pillar // Guaranteed return lower then payments

[weirded]

@Tmask

I currently have 6’347.70 CHF with them.
I really don’t understand how I can calculate the loss for resigning.
Eternal gratitude for whoever can help me out

This is unfortunately on purpose… try to ask for a calculation to the insurance company, im any case you’ll probably have to rely on that (and swallow the pill… )

Welcome to the club by the way…

[Tmask]

Morning all,
Thanks for your kind support words so far, I’m already getting ready to swallow the pill and move forward!

To keep you updated on the process, and have more feedback from you:

• I’ve called Axa and they said that I need to speak with the broker that sold me the insurance.
  I have a call with him Monday evening. → Is there anything I need to be aware of before talking to him? (other then the fact that he’ll try to make me stay?)

• I’ve already created an account on VIAC and have the letter ready to be sent to Axa, should I wait and speak to the broker to find out how much I can get back or should I just send it?

This is for Axa, unfortunately I have a second one with Swisslife, same broker, but I only had it for 2 years (Axa is 3). So I guess the process will be the same.

If anyone could help me figure out how much I can get back it would be amazing.
Thanks everyone for your precious help!

T

[Dr.PI]

@Tmask

I’ve already created an account on VIAC and have the letter ready to be sent to Axa, should I wait and speak to the broker to find out how much I can get back or should I just send it?

Considering that the market (my benchmark is VT in CHF) is in 5+% correction from a previous all time maximum right now, I would just send it.

[Tmask]

Another silly question, there is no guaranteed minimum with VIAC, is that correct? it’s just to understand but potentially I could loose everything right?

Also, what happens if I decide to buy property, can I use my third pillar with VIAC as I would have used a 3a with insurance?

Would it not make sense to keep half of the third pillar with insurance and the other half with VIAC?

Thanks

[Tmask]

Another update for the community,
I just spoke with both Axa and Swisslife and thy have given me the buyback value.

For Swisslife I have paid so far 6566 CHF, payback is 6309 CHF
For Axa, I have paid so far 7800, payback is 7000 CHF

So given the opportunity cost I have lost because of not investing it properly I will only loose a small amount of the capital.

Now, how is this possible, that I don’ t have to pay any other ridiculous penalty as the horror stories share by the community?
Am I missing out on something here?

Thanks

[jay]

@Tmask

I’ve called Axa and they said that I need to speak with the broker that sold me the insurance.
I have a call with him Monday evening. → Is there anything I need to be aware of before talking to him? (other then the fact that he’ll try to make me stay?)

Do you have a separate contract with that broker? Does it include a termination fee?

[Tmask]

nope, i don’t think so

[1000000CHF]

@Tmask

Another silly question, there is no guaranteed minimum with VIAC, is that correct? it’s just to understand but potentially I could loose everything right?

Yes, but if that happens, you’ll need ammo, food cans, and nuclear shelter. Insurance will be of no use anyway. On a more serious note, can you imagine the scenario where the global stock market goes to zero? It can get cut in half in a recession, it can stagnate for a decade, but it’s unlikely anything worse than that will happen. Especially that most of the world’s pensions funds and pension systems depend on stock market returns.

@Tmask

Also, what happens if I decide to buy property, can I use my third pillar with VIAC as I would have used a 3a with insurance?

Yes, you can. VIAC is a normal 3a fund - just without the crappy insurance.

@Tmask

Would it not make sense to keep half of the third pillar with insurance and the other half with VIAC?

No. Better invest half and the other half keep in 3a bank account (or just normal bank account). Then cash will be your guaranteed savings - without the crappy insurance commissions. It’s better to lose due to inflation than to lose both due to inflation and crappy insurance commissions.

[nugget]

here is my two cents to the topic:

Bad investment choices: let others learn from your fails/ mistakes!

Dear all, please present your financial fails and mistakes here, so the others may learn from it! I want to present my bad experience with a life insurance, which i now see as one of the worst thins you can do. Back in 2013, when i was already looking for my money stuff but had no ideas about mustachians, passive investment, and the big picture in general, I went to some independent financial advisor, because some student’s organisation would pay for one (=three separate) sessions. among a l…

in summary:

• bite the apple and cacel life insurance policies asap, and move the funds to viac/finpension.
• if you want to have the insurance policies, fetch some offers on the free market for the individual covers.

[FIREstarter]

@1000000CHF

Yes, but if that happens, you’ll need ammo, food cans, and nuclear shelter.

On a side note: all of this won’t help you, unless you have a dependable group of people. You won’t be able to completely survive on your own. The next bigger (organized) group / clan will just come and haunt you down. Sorry for the off-topic

[yetanothername]

The only thing I did not consider when cancelling my 3a insurance plan was that with certain banks you could have pledged the policy for your mortgage.

In my case I had to move funds to UBS and buy their overpriced 3a funds just to get some return on my money.

[FIREstarter]

@Tmask

For Swisslife I have paid so far 6566 CHF, payback is 6309 CHF
For Axa, I have paid so far 7800, payback is 7000 CHF

1057 CHF lost out of 14’366 is roughly 7%. If I would be in your shoes, I would swallow the bitter pill and cancel both. Better to do it early, than to stick to crappy contracts.

@Tmask

Now, how is this possible, that I don’ t have to pay any other ridiculous penalty as the horror stories share by the community?

Make sure to get the confirmation from the broker via mail, or better: an official document.

@Tmask

Am I missing out on something here?

I can’t tell you for sure, but I know that the Generali offer was crappy as hell. I don’t know if I kept it, but the first 3 years the buyback amount was 0 CHF. So consider yourself lucky.

@Tmask

it’s just to understand but potentially I could loose everything right?

Please consider your risk-tolerance if you are asking those questions. You are in it for the long run, and you might have to stomach 40% loss of book value during your next 20 or 30 years. Which don’t matter, as long as you keep invested.

[Tmask]

@1000000CHF

Yes, you can. VIAC is a normal 3a fund - just without the crappy insurance.

ok but how would a bank accept it without the guaranteed value given by the insurance, I thought this was the only actual advantage of an insurance 3a

[Tmask]

@FIREstarter

Make sure to get the confirmation from the broker via mail, or better: an official document.

will do I have a call on Monday, hopefully no surprises by then

[Burningstone]

@Tmask

ok but how would a bank accept it without the guaranteed value given by the insurance, I thought this was the only actual advantage of an insurance 3a

As someone said above, most banks require you to move your 3a funds to one of their own products in order to pledge them for your mortgage.

[jay]

You can withdraw your assets from Viac to buy your primary residence, same as with other 3a accounts. In that case Viac will sell all your investments and no guaranteed value is needed.

Viac also allows you to pledge your 3a portfolio as additional collateral, in which case the investments are not sold. However, it’s up to the lending bank to decide whether they accept Viac 3a as collateral for the mortgage or not.

As Viac doesn’t allow extremely risky portfolios, banks could easily accept at least part of a Viac portfolio as collateral. However, they obviously don’t like seeing customers using competing 3a offers, so they may refuse in order to make money from their own 3a fees. The WIR bank might allow pledging Viac portfolios but I don’t know.

[Cortana]

@yetanothername

In my case I had to move funds to UBS and buy their overpriced 3a funds just to get some return on my money.

Did you already make the change to the Vitainvest 100 Passive? 0.90% total TER.

[yetanothername]

Not yet, as soon as the year end stress is over, I’ll take care of it.

[Tmask]

I’ve created the account with VIAC and will send the letters to Axa and Swisslife tomorrow.
A little suggestion on VIAC, what do you think of the Global 60 strategy? should I increase to global 80?

Thanks

[Dr.PI]

Summarize all assets you have, including 2nd pillar, before deciding anything about assets allocation.