Sorry for the delay in responding.
Yes, many on the forum have advised me to cancel outright. By doing that, I incur a loss of approx. CHF 9,000
I am trying to get the annual premium reduced to CHF 600 and also trying to investigate of to utilise the eventual maturity value of the policy, approx. CHF 32,000 now and if reduced, around CHF 20,000 could be used against puchase of a house/apartment.
I have a meeting with Axa on 06 Dec and will update the forum when I come to know of the exact next options presented.
So I also signed one of these scam…and now did the sad maths in case it helps someone else:
Contract, rounded values to give an idea:
Signed in 2012, for 36 years
Guaranteed capital (alive at official “retiring”, or dead before retiring + 2 years): 91 000.-
In case of incapacity of working (valid after 24months): 18000 / yr (and 3000.-/yr contribution below stopped)
Contribution: 3’000 per year
Breakdown:
650.- for the incapacity of working
2350.- for the life insurance “linked to pension funds” (complete blackbox !!!)
Today I have a value of about 13’000.- according to statements
Maths:
I contributed 25’500 already since 2012. by the end of the contract I would contribute about 108000.- with probably only the guaranteed capital back so a loss of about 17’000, and that’s also without taking into account likely inflation losses !
I am investigating this, but as I understand, most likely the purchase value will be close to 13’000 (probably less with some fees). So more or less I expect I lost 50% of my contribution, however to be fair I have been insured in the meantime. What’s the cost of these insurances?
Costs of insurances:
The incapacity of working is clear on the contract: 650.- / yr
The life insurance is in average above 800.- / yr ((25’500-(8.5yr*650)-13’000))/8.5yr
In this black box, I’m not sure how to take into account interest of the funds. They change regularly the funds so it’s difficult to have historical data. The one I have now is 1.78% rolling year.
If I get it right, the interests are being sucked by the life insurance which is really expensive in a black box! And also the contribution to the salesmen…on top of this, according to other posts, a life assurance would be around 450.- / year only.
Next steps
I will try to have an appointment to understand:
-exactly the costs of buying back. Looking at this thread, I’m already convinced it’s the right decision.
-understand the scenario where I contribute much less than 3’000 per year while keeping insurances
-understanding the insurance landscape. Life insurance is not so important to me, but the incapacity of working is, as I have quite risky hobby. I need to understand how much it would be and if it exists in a single assurance contact, I guess then not in a pilar 3a.
Open questions
Maybe you guys can help?
-Did anybody investigate the cost of a separate “incapacity of working” insurance? Is is always linked to a pilar 3a or can it be purchased separately (as life insurance can if I understood?) Or is the mustashian way, that anyway you can manage with your own investments (would not work early in the process as you don’t have enough capital)?
-I have read some posts about buying pack such a bad package as above and transferring to other pilar 3a schemes such as VIAC. But how do you deal with the fact that you can only put 6800.- per year? Is it possible to put more in VIAC accounts but then you can declare only about 6800.- in tax deduction? How to avoid further taxation losses when transferring funds above 6800.-?
Thanks & cheers.
the basic insurance is already included with your AHV payments
viac scams you with hidden forex fees, it’s not worth it today - there are better options now
A transfer doesn’t count against the limit (and obviously doesn’t bring any tax deductions).
In my case AHV estimation would be around 2’000 per months, the insurance I mean add some cash on top of this.
Ok, found the topic to study thanks VIAC hidden spreads - #5 by pandas
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Ok, so a 3rd pilar transfer as not limit as such, only tax deduction is limited. Makes sense, thanks
I’ve used one for some time : 500.-/mo insured with no more contributions in case I end up having to use it. Cost: roughly 950.-/year for a 33 y.o. male with Swisslife. It’s still a 3A contribution (tax deductible, counts toward the max amount one can save per year) but it’s not linked to any sort of promise of accruing any sort of capital, just a pure insurance product.
It was still a mistake (I don’t have any dependents and could have trimmed down my expenses should the worst had happened) but it could serve a use in some cases (freelancers, bad 2nd pillar coverage).
Ok, I see, interesting to see other values, thanks. Seems that these type of products are only on 3a. And also extremely expensive. Interestingly in my contract I’ve got more insured for lower stated fees, but at the end of the day it’s a big black box…as I have been employee so far, seems that AHV + pillar 2 should cover enough in case of work incapacity. Will check further.
Congrats for closing this sh***!
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Congrats!
I still have to make the decision for myself… it’s quite hard ^^’
If I cancel everything, I’ll get nothing cause I only paid for 1 year…
You already lost this money the day you signed the life insurance contract. These are sunk costs, there is nothing you can do that will bring them back.
If it helps to make up your decision:
- Suppose you stay in this contract until retirement
- Compute how much money you will have paid into the contract in total, let’s call it A
- then look at your contract and the contractual value that they expect to pay you at retirement, let’s call it B
- In 90% of the cases, A >>> B , that is, you put more money in the contract that you will get at the end.
- Not only are you incurring losses, but you have a huge opportunity cost: compute how much money you will have if instead of paying into the life insurance, you would have put the money into a low cost index ETFs (historical average returns of 6-7%, which are still relevant for a 30 years period). For instance, Mr Paprika figured out here that by paying only 100 CHF per month into his life insurance, he would incurr an opportunity cost of around 100k CHF.
This is not insignificant: either you bite the bullet now and renounce to the money you have put in the contract, or you will later and the costs will be even bigger.
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Look at it in a positive way. You get out after only one year! There are people that got it after 10+ years and lost several 10k in opportunity costs.
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Thanks, I guess I’ll make my calculations tonight I very probably follow your advice! 
I’ll continue to read the forum for whether use viac with an affiliate link, frankly, or finpension…
If you have any idea, feel free to DM me, or tag me in the appropriate post thanks again for your advice everyone !
Interesting conversation.
I have recently started a family (twins) and was thinking about life insurance.
What I am taking away from here is that, if I really want to get a life insurance, I should buy a separate insurance product and keep my investments separate.
Did I get it right? Is anyone else here a parent or are you all trying to retire by 40?
You can have a 3a insurance with a very low investment part (if any needed), the rest as fee only for the risk. The advantage of such a contract would be that is tax deductible (3a), but you don’t have to pay taxes when the contract ends as you don’t get the fees back (just the small investment part).
(at least it was 15yrs back as I had some 3a life insurance contracts).
Get a 3b life insurance and do the rest with Viac/Frankly/VP.
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Coming to this late, and kicking myself for my idiocy in signing up to a similar kind of scam! My situation is this - I have a 3A tied to my mortgage, having bought an flat here in Vaud in 2019. I was ‘sold’ the 3A by my counsellor at BCV bank, acting in the guise of being my ‘financial adviser’. I was so naive that it didn’t occur to me that he was doing a fantastic saleman’s job on me and earning a fat commission in the process. I was in a stressful, separate legal dispute at the time, we had a newborn baby, work problems. No excuses though, I didn’t read the contract in enough depth.
Anyway, my policy is with Retraites Populaires (Lausanne company) and seems especially bad. 26-year contract. Prime of CHF 6,826 each year (I have paid x2 to date), of which only CHF 4,762.60 is saved each year. Around 2K per year goes on the ‘prime risque and frais’ (CHF 2,063.40 in 2019!), which is a total black box in terms of how it is distributed - the policy has life insurance payout of 500K, and also an incapacity benefit element.
Wondering now what my exit options are, and whether BCV bank will even make it possible for me to quit it?
1.‘Valeur de rachat’ (‘surrender value’) as of November was CHF 7,498.15. I suppose I’d get even less back if I went down this route and requested it? And according to the contract, I can only do this if I fulfil certain conditions - e.g. leave Switz, finance property purchase as a principal residence, etc.
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Transfer the policy. I’ve seen that mooted on here but have no idea whether that’s possible in my case.
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Just stop paying the primes. “There is a clause in the contract that states 'the capital saved financed by means of periodic prime is able to be transformed into an insurance free from the payment of future primes, with reduction of the insured saving benefit, within the limits fixed by the applicable general conditions of the insurance.” Does this mean that the money I’ve paid in will simply sit there accruing their poor interest rate? Presumably the sum will diminish, provided this is possible, as doubtless, Retraites Populaires will skim some annual fees off the top of it.
Just don’t know how to proceed at the moment. My French is so so, but I still find the contractual bases ill written and open to interpretation. I am trying to get some independent financial advice but would be grateful for any advice from people here on how to move forward.
Feel like a total idiot and that I’ve let my young family down badly. Also feel that the policy was missold, but precious little I can do about that. Yours despairingly.
My wife and I had a 3A + Life Insurance with PostFinance + AXA and we simply sent a letter saying something like “please cancel this thing right away” and they just did. Since we were only 1 year on this scam, our “Surrender value” was zero, so we basically lost all we had there (i.e. 1750 x2 = CHF 3500).
Your case might be more complicated since it’s linked to your Mortgage but I still believe there’s a proper way out rather than simply stop paying the primes. I would imagine it’s possible to cancel and link your mortgage to a new 3a like VIAC, Finpension or even a “normal” 3a (without insurance) from your bank.