Why not? Saving, investing and early retirement aren’t in any way gender-specific, are they?
Agree. I prefer the liberal range of investment strategies, the fund selection and the more no-nonsense approach. I don’t need insurance. Even if it’s touted to be free, it probably isn’t entirely. finpension seem more of a small upstart though, lack the direct backing of an established bank that VIAC enjoys, and the (albeit small) error in their T&C wasn’t confidence-inspiring.
In the end, I am keeping about half of my investments with VIAC, as I don’t believe in putting all my eggs in one basket. The couple of hundreds above 6000 I invested with frankly, just for fun (and curiosity that got the best of me).
Wouldn’t say 95% (without being boastful, I for one haven’t. Then again, I’m one of the low earning apes here, so can’t afford it), but it’s perplexing how many did. I mean, did or does anybody even understand these policies before signing up to them?
Welcome to the club. I also didn’t sign any 3a insurance, so we are at least 2 people already
I did a good amount of due diligence when I created my first company. My insurance broker also pushed me hard to sign a 3a insurance. Which lead to my natural stubbornness kicking in and really checking the contract thoroughly. It’s almost impossible to understand all the clauses and calculation models, unless you are a mathematician working for an insurance. Fortunately, they had a table with the buyback values after every year. The first 3 years, you wouldn’t get back a single Rappen (while having paid almost 20k). In the 4th year, buyback value was around 3k. Which meant that commission and fees were accounting for almost 24k! I confronted him with this, and his answers were just stupid.
The only advantage for the 3a insurance (from the perspective of a company owner) would have been the pre-tax money spent on the insurance from the company account. Not a great deal if you are loosing 24k in the first 4 years. Additionally, he couldn’t answer my question how this is working if I have other 3a accounts as a private person. Still interesting to see that the government is allowing 3a as an insurance to be paid by the company (they don’t allow it for finpension or VIAC).
Was this just the word of the broker or did you have a source on that to confirm? I did some research on this a while back and, as far as I remember, life insurance is not allowed to be paid from pre-tax company money. There have been court rulings about this. KTG premiums can be paid in full by the company, though, as long as all employees (if any) get the same benefits.
I have a 3a life insurance myself as I don’t have a pillar 2 but it’s just an insurance, not combined with investment. The premium is just 4% or so of my total 3a. The rest goes to Viac. The broker tried to convince me of a combined life insurance, of course, but fortunately, I checked the numbers and rejected that offer.
I didn’t do any further research on it, so it was just the word of the broker. Some brokers would sell their mother, so I’m not surprised.
Nevertheless, it was one of the big companies in Switzerland, and I’m sure they have offered the same contract to other companies before. Which doesn’t mean it’s legal, but they would try it anyway.
I think that’s a good approach. If it’s only 4% for the premium of the insurance, that’s a good deal.
I just double-checked the old contract (still have it), and it’s not as bad as original thought. Still, it’s far from good. First two years, you don’t get any buy-back. After year 3, you are guaranteed to get back CHF 6’731.- (from total amount of 20.5k = 3x 6’826.- back then)
I am also surprised how many in this forum fell for it, but surely it’s not 95%, I am also a lucky one who understood to steer clear from insurances early on.
I was one of them, but I’ve subscribed to a 3b in Geneva, which was tax deductible on the first CHF 2’200.-. Then, when I moved to Vaud, I ask to transfer it to a 3a (in march 2020). However, I’ve made some due diligence before paying the 3rd premium and I cancelled it once I discovered the “trickery”. If I subscribed to a 3b in 2018, it’s because of my lack of knowledge and because I just followed what my parents did when they were young.
I’ve learned my mistake and since then, I make all the due diligence I need before subscribing to anything, especially with insurance.
Thank you all for your genuine input on my post.
So after reading all your good feedback, this would be my path forward:
Ok first don’t kill me for saying this, I had this 3a with AXA through a guy who approached me in 2016 and I just went with it as I had 0 knowhow on how this investment etc etc works, so now I am going to change to AXA and then ask them what I pay and what I don’t pay and then weigh my benefits. After that I am either going to finpension or Viac.
I woke up recently . Had no idea where I am paying the money.
Anyways better late than never.
Thank you all so much.
May be you will hear from me again…
Interesting thread.
This product has been offered to my by the person who’s actually escorting me in the hypo evaluation.
Looking at the temperature of the thread itself, I see that the majority of the people here are not fully supporting this product (except for some specific situation).
The difference I noticed, compare to the contract issued to Stephane, is that today (2022), the quota of the inability policy (tailored on my age and situation, I guess?) is 202.60 CHF, (where also 18 CHF are included, for the option “priviledge”), given 6’883 entire yearly rata.
The product itself guarantees 80% of the capital. Basically, at the end of the contract, I need to say goodbye to c.ca 30K.
But in the other side, if I’m the one to say saludos amigos, then my family will get these capital guaranteed (also at the beginning of the contract) - well it’s a life insurance
This product has been proposed as a 3a is required to get additional discount/good condition to the same financial issuer.
Actually, till before readin this thread, I was about to consider it as a viable option (not overthink, understand the basics, pay and let go approach)…
I’d add some nuance and say that pure protection products (insurance only, no savings/investing part) in 3a can be useful if you don’t max your 3a already. This stands particularly true for self-employed who have more 3a space and potentially need more insurance).
The crooked life insurances 3a has been already extensively discussed on this forum. I think we all agree that those products are in no ways beneficial to the policy holder.
What I find concerning is that there is a legal framework to enable those products. Especially putting into perspective that we may face issues to fund pensions in a few decades, I find disturbing that we let insurer to gorge themselves on tax-deductible premiums.
What do you think would be the best way to fix the problem from a legal point of view?
My proposal would be to make the part of premiums used to finance the life insurance not tax-deductible. This would in practice force the insurers to be transparent on the split of life insurance vs retirement capital savings of the premiums.
I think educating the public about the facts is much more beneficial than imposing regulations.
The fact is, it is theoretically possible to create favorable permanent life insurance products which could compete with other financial products. But this will only happen as more transparency and competition is brought to the market.
We’ve seen this development with mutual funds, with ETFs introducing much more transparency and lower costs. Conventional asset management services too are evolving into cheap, transparent robo advisors. This didn’t happen because of regulations on TERs or asset-management fees.
In my point of view the proposal above would not introduce more regulations. It is also miles away from regulating fees and/or the structure of those products directly. It would bring however more transparency.
One could argue that today tax deductible structure favours the combined product over taking a life insurance and retirement capital saving plan separately. Why should that be the case?
It is not always possible to deduct the same amount for a standalone life insurance since in practice the deductible can be maxed out by the health insurance premiums alone.
But point taken, it is only that threshold which makes the life insurance premiums “not deductible”. It can and actually will increase.Thus, my initial proposal is silly.
What about making each component of the combined products premiums deductible in their respective bucket?
The split of the premiums contribution to each component would then have to be reported transparently.
I know the view here is that 3a with insurance is worse compared to a 3a with a bank (VIAC, frankly etc). Today I have everything with VIAC Global 100. My financial advisor is recommending an insurance based solution and I am trying to make my own conclusions about it.
Here is my understanding of the Helvetia Performanceplan. I can choose my own funds where the money will be invested. The option selected by my advisor is
UBS (CH) Investment Fund - Equities Global Passive W
UBS (CH) Investment Fund - Equities Switzerland Passive All W
The TER is low at 0.14% and 0.19%. Lower than VIAC. The expected returns are similar to VIAC Global 100.
This part alone already surprised me. Is the investment here really better than VIAC?
Regarding the flexibility I was told that every 3 years I can adjust the payment plan if I want. To a minimum of 100 CHF per month.
The main selling point from the advisor is that since I earn significantly more than my wife it would cause a huge impact if something (death, unemployment due to sickness) would happen to me. Hence it would be foolish to not be insured against it - those are the words my advisor.
I don’t know what to think. The investment plan does not seem that bad. The negative effect on my wife in case I am unable to work really worries me as well.
So please mustachian help me before I possibly make a mistake. Why should I stick with VIAC?
Look at your 2nd pillar first. What would be the annuities paid to the widow and orphans? What are the conditions for such payments (based on the pension fun rules)?
At the top of annuities, an employer may subscribe to a life insurance and pays a lump sum to the widow.
In case of death, could your wife increase her salary (higher working rate etc) ?
If all the above arent enough, a pure risk life insurance may make sense.
How is Helvetia product working? How much is used for savings? How much to cover the risk? What are the payouts?
Of course he’ll told you all these good things about it as he earns a large commission (up to CHF 10’000) if you make a contract.
If you really need insurance in addition to what 2nd pillar provides (you need to check what the benefits of your pension fund are for death, disability etc.), make a separate life insurance.
These mixed life insurance 3rd pillar products are always a scam. You pay thr commission of the advisor and they are really intransparent about their fees.
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. Had no idea where I am paying the money.
.