Just to clarify: It’s not about investing these 1600 CHF elsewhere or not. This amount in additional savings willl (likely) only make a minor difference.
But I was assuming that - regardless of whether you take out that life insurance or not - you may/will have other savings.
By saving 1000 CHF (or 2000 CHF) a month, you will have accumulated a savings total of 240’000 (or 480’000) CHF after twenty years - even without receiving any interest or investment return.
Does your family really require an additional 500’000 CHF payout from the insurance in 20 years - considering your children will have completed secondary education - and presumably also (almost?) completed tertiary education by then?
The richer you become (from saving & investing), the less loss of income / missing wealth needs to be replaced by an insurance in case of death. It’s especially true for high-saver individuals/households.
If you have a very low savings rate, have very little savings and plan to support your family / children mostly from current (same period) employment income in 20 years - then a constant payout makes more sense over time.