Life insurance comparisons
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Life insurance is one of the most tried and tested pension products. Over the years, different variants were developed that differ both in their function as well as in their investment form. As a result, those who are considering and comparing life insurance should pay attention not only to the potential returns but also to potential risks and the design of services.
Risk and mixed life insurance in comparison
A distinction should first be made between mixed life insurance and risk insurance. Whoever completes a risk insurance policy (also called death insurance) insures only the survivors in the event of their own death. A savings capital is not formed and the payment is fixed only in the event of death.
Mixed life insurance is the opposite. It combines the protection of the dependents with a savings system in the event of incapacity to work. Upon expiry of the policy, the policyholder is paid a bonus amount. The disbursed amount is composed of the capital invested, profit participation and interest surplus from securities. Insurers provide a guarantee for a minimum interest rate. This is possible since the capital is partly invested in traditional life insurance in conservative investment products. If you look at the guaranteed interest rates of today's life insurance compared to previous ones, they are now significantly lower due to the generally lower interest rate.
Unit-linked life insurance
The sustained low interest rate has significantly reduced the interest rates of mixed life insurance products with low-risk investment products. Not least of all, insurers also offer unit-linked life insurance. Here, the savings capital is wholly or partly invested in mutual funds. As a result, unit-linked life insurance policies generally offer significantly better prospects for returns compared to conservative options. However, the greater return potential is associated with higher risks. Common forms of traditional life insurance are often offered with guaranteed interest rates and a unit-linked savings portion.
Life insurance in pillar 3a
Life insurance can also be included in a Pillar 3a. As a fixed pension plan, they provide tax privileges, since the capital paid can be deducted from taxable income. In addition, interest income is tax-exempt and the beneficiary pays a reduced tax rate on disbursement. However, there are annual limits for tax-free amounts. Alternatively, you can also include a life insurance in the 3b Pillar. Here, however, the possibility of deducting the premiums paid from the taxable income is not applicable.
In the pension plan, the capital of the life insurance is tied to the old-age provision or the event of damage. The earliest possible date for payment of an account in Pillar 3a is five years before the statutory retirement age. Only in exceptional cases can the life insurance prematurely terminate. Exceptions include:
- For the financing of residential property, renovation or repayment of mortgages (only for self-owned mortgages)
- Payment to the pension fund (2nd Pillar)
- Emigration from Switzerland
- Reference to an uninsured disability pension
MoneyPark helps you compare life insurance
Whether a combination of risk protection and financial old-age provision is actually worthwhile, one should always weigh carefully. In the invoice, for example, have administrative costs are included. In addition, the capital is generally tied over longer periods of time and can only be called up under a loss. The premium amount can be paid either as a one-off payment or at regular intervals. The policies vary in terms of premium payments.
MoneyPark’s advice will help you compare different life insurance policies with other precautionary measures. Our consultants work with you in person to prepare a preventive plan, which includes your financial and family situation as well as the market situation and tax savings potential.
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