Free disability insurance and paid pure risk life insurance.
If it would be a fair fee, it would translate into probability of 0.725% to die next year. I think we are better than that.
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US-based, but still lots of similarities.
Again 3 replies limit!
Huh. Now it’s official
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Is that just for the first year premium with future premia increasing in cost?
Hello guys,
I feel like i’m in a tough situation and need advice.
I entered switzerland few months ago, ang got contacted by a broker “mandated by the canton to help new arrivals.”
Not gonna lie I trusted it since I was new and how could it get my phone number and details ?
I openned a 3a Life Insurance through the broker, but I realized my mistake 2-3 months later, looking a bit around, I’ve seen that stopping to pay would just stop the 3a.
But broker contacted me back, mentioning if I was not paying the insurance company would sue me to debt collection office.
By short timing, and couldn’t find material until “deadline”, I paid and got warned that my 3a was back on track…
I realized I got fooled by this broker.
Now, I want to get rid of this broker and to cancel this 3a insurance life policy, I understood I will loose my money on it, but I’m fine with it.
But I’m a bit lost on how to proceed to cut from this broker, and how to cancel this 3a.
Which order ? I heard broker can ask for money, but that is not legit.
Thanks for your advice.
(post deleted by author)
Yeah, I already warned FINMA on their portal.
How to cancel it should be in your contract. Contact the provider.
(I would also let the provider know that the broker is super shady and lied to you, they might waive fees)
Ok, Thank you !
I called and I can cancel the SwissLife 3a Insurance, money on it is loss ofc, but no extra fees.
I made the paper to send.
Now, it is about the broker…
What is the legal way to cancel the brokerage mandate that I had to sign at the beginning (a mandate that was never copied to me).
I cannot find an example of letter to send about the cancellation of an insurance brokerage mandate.
Thank you to anyone that can help !
You can ask them to disclose where they got your details from, according to the new data protection law. (I’d do it and include a sentence in your letter).
That sounds straight up criminal (Nötigung). If you have that in writing, I would report that to police (out of principle).
3a is legit - but think of it as a legal framework within which commercial providers are free to offer different products (with different fee/cost structure and, yes, brokerage/referral schemes).
Thank you for your feedback
I’d like… but it was only verbal through phone call.
Interesting, I was not aware of it. I’ll mention it as soon as I get a letter.
I’d probably kindly ask them, while mentioning that you’re in touch with FINMA? It’s likely to be enough.
Btw I’d edit the title to mention the name, it might be helpful for other folks who would search about it.
I see, hoping it’s is sufficient enough
The broker company you mean ?
Thanks
Yes, the broker (I guess the people who tricked you).
why delete the post?
I suspect it may be someone connected to the broker but let people have a chance to ask the poster questions and for him/ her to respond
Full disclosure: I’ve flagged that post. I don’t know if the hiding process is automated or manual, it seems to just be hidden for now.
I personally struggle to envision people registering just to defend their broker in the way that poster did. If it comes from the company itself, the approach seems very dishonest to me and probably not a very good basis for a Q&A though it might be worth it to call it out publicly and see the potential replies.
3 Likes
Hello,
I signed a Smartflex pension 3a contract with AXA (https://www.axa.ch/en/private-customers/offers/pensions-assets/pillar3-private-pension-provision/smartflex-pension-plan.html) almost 2 years ago. I invested in the “Global” fund with 40% of my capital at a fee of 0.5% per year. At the moment, I have less than CHF 10k in this 3rd pillar, but I’m committed to this contract until 2060.
For the past week, I’ve been in a panic because I’ve read a lot of messages on this forum and this blog saying that this Smartflex product is a scam and that I should stop the contract.
I don’t understand what I have to lose apart from the 0.5% annual fee, and perhaps the fund’s performance, which isn’t as good as others. I know that many people on this forum have the mindset of maximizing their gains, but this contract offers me some security in the event of incapacity to gain. I have no intention of investing 100% of my capital in the stock market. I want to keep 60% of the capital as security.
Is this contract really bad for my investor profile?
What risks do I run by continuing with this contract?
Thank you for your help.
Welcome on the forum. Those questions have been asked countless times, I invite you to try the search feature. Nevertheless:
While I do not know the specifics of AXA Smartflex, generally speaking 3rd pillar contract with insurance companies are not good products. And this for many reasons:
-
Expensive insurance premiums. Your policy is a combined product: some of the premiums is used to pay a life insurance, the other part is invested according to your strategy. Most of the time if you compare premiums for a standalone life insurance (i.e, outside 3a) with the same benefits you will see you are paying inflated premiums. It basically means there is probably much less invested that what you would expect, check the surrender value (Rückkaufswert / Valeur de rachat) on your last statement (or ask for it).
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Hidden fees Most of the time there are more fees that what you expect, e.g., buy-in and redemption fees (often ~2-2.5% both ways), internal fees of the fund (TER), etc. on top of the stated management fee.
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Low performing funds They usually lure customers in very young funds with high theoretical past performance. Why? because it is easy to build of fund which would have performed well when you know past returns. Good returns on a graph always sell well. However, past performance is NOT an indicator of future performance.
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And others.
There is no one-fits-all strategy when it comes to keeping your contract or closing it. Ask for the surrender value of your current policy and check expected benefits/returns of alternatives (e.g., 3rd pillar @ finpension / VIAC with, if your situation requires, a standalone life insurance)
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I managed to get on the path for disentangling myself from this a couple of weeks back. Will terminate it from the new year and transfer to Finpension.
The points against the insurance 3a are:
- You are tied to this until you’re 65
- there is no flexibility in how much you can add, and when - you can reduce monthly contributions (or annual equivalent) to 150-200/month, but otherwise you HAVE to keep paying. This could put you in trouble if you want to take a break, with a bank or VIAC/Finpension you can pay as much and whenever you like
- if touch wood you have a health condition (like I do) they can prevent you from paying the yearly maximum if/when it is increased - big opportunity cost
- the life insurance part is eating a good 15% off your money per year, which is lost forever, they do not explain this in the contracts unless you ask for it. For a test, see the difference between what you know you’ve paid, your portfolio value, and the surrender value, what I expect you’ll find is that your portfolio value is ~80% of what you paid in (REGARDLESS of how the market went, because the underlying funds are mostly TERRIBLE), and your surrender value is ~55% of what you paid in. This number is not going to get substantially better unless you’re nearing retirement - I mean you will lose ~45% of your contributions if you leave early.
- to expand on the point above about the funds: there’s no flexibility in what you can use. I am/was with Swisslife and saw a 1.3% gain in my portfolio while the global market (eg VT) did 14% this year, this is an insane opportunity cost
- so in summary, they take ~15% of your pension contributions every year which you can never recover, that’s money not saved and not invested (but you DO get tax benefit for it), and they take ~45% if you leave before you’re 5 years from retirement
- you can get cheaper and better dedicated life and/or disability insurance, and better invested pension
- if you want the tax benefit of 3A and exactly 0.0% risk put it in the bank with 1% interest, this is also better than 3A with life insurance.
People here like to call it a scam, I consider this an exaggeration. It would be a scam if they run away with our money, it works for some people, just not people who want to invest their pension. As pension investment vehicles they are absolutely terrible. You can do better.