I have the impression that this topic has not been widely discussed but still very interesting for anyone who would like to buy a house or apartment. I am in that case at least.
I find myself in this situation:
- With my wife, we will buy an apartment which costs approx. 770’000.- CHF.
- We looked mostly at banks but also at 2 insurance companies.
- 1 Insurance company offers lower interest rates but requires a 3rd pilar.
- Based on many researches in this forum, such 3rd pilar products are not recommended. Lack of transparency, performance, etc.
- BUT… would you change your mind if the interests are lower? That is the question I need to find an answer to. Maybe you can help
I got the following offers from 3 companies (the top 3, I contacted others as well):
- Caisse de Pension de la Poste / Pensionskasse Post
- Vaudoise Assurance/Versicherung (VD)
I requested the same offer with 2 mortgage slices (‘tranche’ in french):
- 2/3 with a fix rate, 10 years
- 1/3 with a fix rate, 5 year
Here is the comparison:
- UBS: 10 years = 0.93% / 5 years = 0.81%
- Vaudoise: 10 years = 0.78% / 5 years = 0.52%
- Poste: 10 years = 0.89% / 5 years = 0.66%
Within the first 5 years, I could save the following amounts if I prefer 1 company over the others (assumption: I pay back my debt every month, direct instead of indirect payments):
The only problem I have with the offer from the Vaudoise Assurance is that they request an indirect payment via a 3rd pillar. The indirect payment is approx. CHF 6600.00.
Based on various offers I got from la Vaudoise as well as other insurance companies, the following could be possible:
- Two 3rd pilar accounts (1 for my wife, 1 for me)
- Get insured in case of death, incapacity of work and exemption of paying the ‘prime d’assurance’
At this stage, I am 50/50. It does sound like a smart move. or is it not? With such 3rd pilar, that is what is offered (1 of many similar examples):
- Annual insurance premium: 3’480.-
- Saving (épargne): 3’150.- (40% stock market, 60% bonds)
- Insurance: 329.20.-
The coverage is the following:
- Capital (death): 117’000.-
- Incapacity annual annuity: 6’000.-
- Exemption of paying the ‘prime d’assurance’ in case of incapacity
If I retire as planned in 2055, that is what (= total) I will pay for this 3rd pilar (that’ll be the same for my wife, of course):
- Saving: 107’100.- (the company guarantees 55’071 which is nothing)
- Insurance: 11’192.- (this is generally less expensive than buying an life insurance without a 3rd pilar account)
Based on their estimation, the moderate case (performances between 2 and 4%) would generate a capital of 177’810.00.
If I would invest the 3’150.- myself and hope for a return of 3% on average, I could expect a capital of 182’500.00.
Based on these calculations, I do have the tendency to think that the insurance company is not the worst solution.
Do you have another opinions? I would love to hear them! Thanks.
Please note that I will also be a father which pushes me to think about protecting my family in case of problem (illness, accident)