Mustachian term life insurance

Dear fellow mustachians,

I am looking for a 30 year term life insurance policy with constant benefits of around 300k-400k CHF? It seems the premiums range from CHF 865-1400. Helvetia provided the best quote so far. Do you have any suggestions for a good provider. I have checked so far Zurich, Axa, Swisslife and Generali.

Regards.
Element

Hi!
From what I read here, it seems that everyone is not recommanding a life insurance, cause it’s a trap for your money.
I’m actually cancelling mine, as you read here the argument from @Julianek :

We are with Mobiliar, but with a decreasing sum and for only 15 years as we expect to have much more money then. Unfortunately, it is very difficult to compare.

There is a difference between term life insurance (Todesfallrisikoversicherung) and life insurance. The first one is like any normal insurance, you pay something and hope you don’t have to use the insurance (and you don’t get any money if you don’t have to use it) whether the other one is combined with saving and you should get something after the insurance is finished.

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No that is incorrect.
What everyone is calling a trap is a life insurance tied in with your 3a pillar account.
(Term) life insurance as a separate policy is a perfectly reasonable approach.

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oh sorry, I was reading too much about the 3a life insurance that I read the message a bit too fast.

I would extend that for life insurances including a savings/investments part.

And as you said, Term Life insurance can make sense as long as you can’t self insure yourself if you have dependents.

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It seems combining any sort of savings component with life insurance product is a bad idea. I am also not keen on adding any insurance on to my 3rd pillar account.

Update: After comparing many providers I found https://www.vaudoise.ch/ to be the cheapest, around 550 CHF for 350,000 CHF coverage

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thanks for the info, I’m looking in something similar as well. I think the cost/benefit is worth it if you have children or a partner with low income. Mostly to protect against unexpected events, car accident, who knows even Covid , young people are not immune.

Unfortunately, in some cantons, you cannot deduct it from taxes, if your health insurance plus dividends is already over 5200 CHF.-

Here’s a new term life insurance with much lower premiums than other Swiss insurers offer. The underwriter is Bâloise, so it is solid insurance. According to their calculator they would charge me 40 francs a month for 500k of term life with a 24-year term, which is less than half of what I pay with Vaudoise (which up until now was the cheapest Swiss insurance with fixed annual premiums for the full term):

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I’m looking into the same issue here i.e., a term life insurance for my dependents with low income. The insured sum is 1 mio CHF to achieve a semi-fat FIRE in approx. 10 years. I’m wondering the pros and cons between a fixed sum vs. a decreasing sum as I expect to increase my NW in the next 10 years, then the need for an insurance disappears in 10 years when I press the FIRE (nuke) button.

Is it the right reasoning, or did I miss something?

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Thanks @Daniel for pointing out the new kid on the block SafeSide.

Reading this article (SafeSide Embarks on a Mission to Simplify the Swiss Insurance Landscape | Fintech Schweiz Digital Finance News – FintechNewsCH), it’s daunting how many life insurance policies are so crappy:

The tendency to push consumers into more expensive products can be seen in the Swiss life insurance data. Whereas there are more than 2.2 million individual life insurance policies only close to 600’000 are for pure life insurance, the others are mixed life insurance contracts and incorporate some form of capital accumulation in addition to financial protection. Unfortunately, mixed life insurance policies have many deficiencies such as inflexibility and high fees. As a general rule SafeSide recommends to separate investing and risk protection.

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Noob question alert!

I have some life insurance via my employer (in terms of spouse and orphan pension / lump sum benefit).

Does having a separate term life insurance add up (on top) to whatever benefits are already covered by my employer’s pension? I understand that payout will be via different insurance companies.

Or is it the max of 2?

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Life insurance is completely separate from the insurances included in your pension fund. That is to say, your beneficiaries will recieve life insurance benefits on top of the survivors’ pensions which they receive from social security and your occupational pension fund.

The same is true for multiple life insurance policies. Each benefit is paid out separately. So if you get one life insurance for 200,000 francs and another for 500,000 francs, with your spouse named as the benficiary on both, your spouse will receive 200,000 + 500,000 francs, or 700,000 francs in total if you die.

This is the standard practice in Switzerland. If you have foreign life insurance policies, it is worth looking into the rules in their country and reviewing the terms and conditions in detail.

Don’t worry, it isn’t a nube question. Many people have that worry and rightly so, because many insurance companies do include clauses by which they limit benefits based on other life insurance you hold. But I haven’t (yet) seen such clauses in Swiss life insurance policies.

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Thanks @Daniel for the answer and also the link above to safeside. You have mentioned it being Bâloise at the back end and hence solid.

  • Is there is resource you know about the financial ‘health’ of the different life insurance companies? I like that it is cheap (33 CHF per month for 500k CHF cover for 20+ years) but what happens if the insurance company has bad financial health and folds up/default.

  • if I take a 20 year term (with safeside or otherwise) but leave Switzerland after 10 years, can I still continue to pay and be insured for the whole 20 years?

Bâloise has an A+ rating from Standard & Poor’s. I looked over the T&Cs of Baloise Secure Plan, which is the policy you actually get from SafeSide. Moves to many (but not all) countries in the EU and EFTA do not affect your insurance at all (people in those countries can apply as new customers as well). If you move to a country that isn’t on the list, you have to inform Bâloise. The premiums and/or death benefit may be adjusted to match the new risk.

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@element532 @Daniel @Erma do you guys have term life plans with:

  • natural premium: increasing over time
    or
  • levelled premium: fixed over the duration of term

I was reading up on Baloise Secure Plan and also on SafeSide website. It is natural premium, but it doesn’t say how much it rises (or can rise) over time.

@glina you mentioned in another thread about having PAX term life insurance with decreasing cover over time. Do you pay in same fixed premium over the entire term or it is variable and can go higher?

We have fixed premiums with a decreasing benefit over time as we thought we will have more money in 10 years and the mortgage will be lower.

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I have a fixed benefit with a fixed premium for the full term (currently with Vaudoise). In my case I have life insurance to provide for my kids until they are grown, should something happen to me. But if you are insuring a mortgage or loan which will be amortized over time, then a decreasing makes more sense. You could also use a decreasing benefit if you will steadily add to your savings over the term (and thus require less insurance to make up the deficit every year).

SafeSide has rolling premiums. This means you have a 1-year term which is automatically extended each year of the chosen term. You cannot lose your insurance until the end of the full term, but the premiums can (and will) increase every year. That is why the premiums for younger adults are so affordable. But the premiums get much higher as you get older. This is the same model used by Swiss Life.

Personally, I prefer a higher premium which remains the same each year of the term because it’s easier to budget. However, you would have to do the math and compare the full cost (you can use the moneyland.ch life insurance comparison to find the total cost of SafeSide. Just click on “breakdown of costs” to find the total costs).

If (like me) you prefer fixed premiums and a fixed benefit, the cheapest I have found is Vaudoise. For the long term I chose, the total cost for the full term works out cheaper than SafeSide and Swiss Life. Of course, for a short term, SafeSide or other rolling-premium insurance is cheaper (assuming you’re young).

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Thanks for the responses.
I looked up total cost for same constant cover (500K CHF) for 15, 20, and 25 years (which would cost ~9.3K, 16.5K, 26.6K ).
from my quick and dirty calculation, ~7.1% increase in premium year over year (compounded ofcourse) (starting with 400 this year) would roughly fit the above number for all 3 durations.

Now can I assume that the total cost over 15/20/25 years given by moneyland / safeside /baloise FIXED? or can it go up unexpectedly (a few years after the contract is made)?

I do hope to FI in ~ 15 years, but if I take a mortgage inbetween, having a constant cover, even with increasing cost (400 CHF this year, 1050 CHF in 15 years, 1550 in 20 years, 2200 in 25 years), will still be worth the peace of mind!

May I should drop an email to Vaudoise to enquire for fixed cover and fixed term, and tally the numbers :slight_smile:

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