Funds from the exceeding fees invested in funds : CHF 1â439
Only the CHF 1â439 are subject to market fluctuations (which of course has crashed since february)
Loss on this policy : 28â000 - 20â742 - 1439 = 5â819 (certainly a little bit higher since market crash).
My question is the following :
Should I cancel this policy as of end of april 2020 and transfer this money in my VIAC 3rd pillar ?
Take a death insurance not linked to my 3rd pillar (I have 2 little kids). Generali for example offer for ~250 CHF premium per year a constant insured capital of CHF 200â000 for 20 years.
I am in a similar situation as I have a life insurance with a Swiss insurance company where I do pay yearly 4000 CHF and then complete 2800 CHF to VIAC (to max out the yearly 3a contribution).
How can you âtransferâ the money from your canceled life insurance policy to VIAC without triggering taxes? Is that even possible?
Ok, I think that in this case life insurance money is tax free.
But I still donât understand how the transfer technically would work. How/why VIAC would accept suddenly an important sum of money? I probably would need sort of proof that this money is part of my accumulated 3a pillar over the past years!?
In VIAC Portal you can generate a transfer order, then send everything to them (with life insurance resignation letter). They will ask for the transfer for you.
Big news for me : I cancelled this life contract !
I just received the confirmation from Zurich. Amount to be received on VIAC : CHF 22k
Amount paid for this **** : CHF 28â000
Effective lost : CHF 6â000 - risk premium of CHF 1â400 (~200 CHF per year) = CHF 4â600
I canât believe how many are falling into this trap? Is there a reason for that? I mean we are talking about people that know one or two things about finance and investing.
yes. Financial advisors benefit largely from those polices, hence they actively market them. It is very lucrative to sell them, since intransparency allows for relatively large provisions. It takes well-above-average knowledge and willingness to get behind these products. Since the vast majority of people does not have them, these products keep beeing quite successful.
Indeed, youâre way more likely to get an email/call selling you those than a cheap passive solution. And the names are reputable (big banks/insurance names), many people tend to think the advisor will have their best interests in mind (but theyâre salespersons, definitely not an unbiased party).
Well⊠One of the first advices one can read in the FI community is that you should be maxing out your 3a. And even if there is a cautionary âbut not from your insuranceâ, itâs likely to get overlooked. Add in the eager âadvisorsâ, and there you are.
Iâm not sure I understand your comment. For most people in Switzerland, known investing options are:
Savings accounts â yields are currently in the 0% range ;
Real Estate
2nd pillar â invested by pension funds so no direct play in it ;
3rd pillar
° bank option â yields in the 0% range ;
° insurance option â the advisor is sure to tout a high yield and to downplay the part of the money that doesnât go into savings, or the high fees, often both.
For the average+ investor, pre VIAC-like solutions, insurances 3A solutions looked like an attractive option. Even now, VIAC/Valuepension are pretty recent actors that some canât yet trust with long term retirement money (Iâm one of them, even wondering if, as things are, putting money in 3A is really interesting on a risk adjusted basis), which leaves the old same insurances and banks as considered options (Frankly. may change that with ZKB as a trusted partner).
I would also include stocks/equity and equity funds among them (âknownâ investment options).
Itâs just that they are frequently deemed as too risky and/or too expensive/requiring to much capital.
I think for a 3a contract they will ask you for a new account within the 3a system to transfer the funds that you might have. So if you just send the old contract number and company address to your new account provider they will do it (the cancellation) for you. (at least that is how it works with viac if I remember correctly)
It should be enough, maybe with the 3A informations that Gesk mentions.
If it isnât enough, it will start the process and youâll be able to provide whatever they ask for after that. Unless youâre certain that the earlier next term to cancel it is the beginning of next year, Iâd change that formulation to mention the 31.12.2020 so as to make sure that it doesnât overlap with your 2021 available 3A contributions. If thatâs not an available term, theyâll mention it to you and youâll be able to double check it to see if theyâre right on it.
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but I have the following opportunities :