After reading the ‘learn from mistakes’ post and reading about the life insurance pilar 3a ‘bundle’ warnings… alarm bells went off.
I was sold this by a financial advisor after having arrived in CH, just getting started with my own business. At the time (to give the FA the benefit of doubt) the idea of disability/death insurance seemed like a good idea (although i don’t honestly remember). times changed and now since years I’m employed with Swiss company with company pension etc who would pay these death/disability.
Standard story I guess for the regulars here welcoming new forum members!
I’ll cut straight to numbers.
Life Insurance & pilar 3a
- Started in 2010
- 37 year contract (35yr@ 3600chf, 2yr@ 3028.10chf annual premiums)
- Guaranteed payout in 2047 of 129,890CHF. Although i would put in 132,056chf. First real ‘huh’ moment.
- Documentation/statements detailed nothing of capital saving vs insurances split as per other stories.
- Phoned them. ”Oh we don’t know your interest rate on the capital, but you could work it out if you want’. Thanks guys.
- Sure enough after pressing- Insurance fees account for approx 20% of yearly premium - 750/chf yr.
- So actual annual capital building then calculates at approx 35yr @ 2850chf, 2yr @ 2422chf. Totalling 104,594chf, meaning 27,462 going on insurance fees.
- As guaranteed payout is 129,890chf, then based on my actual capital investment of 104,594 the investment earns around 1.16% interest over 37years
- This seems like not optimal plan.
Of course there are penalties for breaking these contracts, but I’m wise enough now if that needs to happen, I have no hesitation. Have just read the blog post on pilar 3a index fund 45 R… onwards and upwards
Any advice.thoughts on the above very welcome. Either way - I think its time for some more phone calls