Life annuities in Switzerland

Are there any special advantages to getting life annuity insurance in Switzerland? Who is this type of insurance for?

Hi there,

In Switzerland, life annuities are rarely used as a full retirement funding solution. Instead, they complement the income you receive from social security, occupational pension funds and 3a retirement account savings.

Life annuities typically pay out a fixed pension when you reach a certain age, and are best suited for healthy individuals who are likely to live to a very old age (most policies only mature at age 70 or later). A life annuity can help you enjoy a higher income in your old age than your salary-based occupational pension and limited social security pension allow for.

While 3a retirement savings can be quickly depleted over a long retirement, a life annuity provides a regular, guaranteed income from the time your policy matures until your death.

Unlike typical life insurance which pay out a benefit when you die unexpectedly, life annuities pay out benefits when you stay alive longer than expected. Part of the income you receive from life annuities (40%) is counted as taxable income.

Important: When choosing a life annuity, pay careful attention to the guaranteed benefit stated in your policy. Insurers often advertise "possible" annuities based on unrealistic returns. The only annuity you can count on receiving is the benefit guaranteed by your policy.

Best regards from Moneyguru

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