To answer the recurring questions about insurance 3a products, this article gives some scary examples of how much you pay the broker, the insurance for admin costs, and the life insurance part.
So, the answer is still "no"and beware of the nice broker – these are exactly the products that buys his nice car.
https://www.srf.ch/sendungen/kassensturz-espresso/kassensturz/lebensversicherung-3a-3a-sparen-und-lebensversicherung-intransparent-und-teuer
Posted by BNI_sp
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English version (Google translate):
3a savings and life insurance: non-transparent and expensive
The idea sounds tempting: a combination of life insurance and Pillar 3a. But many experts advise against it.
Author: Marianne Kaegi
Tuesday, 28.05.2024, 21:01
“Above all, this is an interesting product for insurance companies,” says Jan BĂĽhler. He is annoyed. Ten years ago, he signed the so-called third pillar life insurance policy, also known as unit-linked life insurance, at his kitchen table.
The broker was an acquaintance who assured me that he only sold what he would take out himself. “I thought it was a clever 3a solution.”
Experts advise against mixed life insurance
The broker had shown him good return opportunities: 2.5, 5.25 or 7.5%. But he was not aware of what exactly happened to which part of the money he paid in. The broker advised him to leave the money lying around for ten years and only then look at it again.
Karl Flubacher, managing director of VZ Vermögenszentrum, has a fundamental attitude towards such insurance products: “I strongly advise against mixed life insurance, even as part of a third pillar, because it combines savings and risk protection.” This has two disadvantages: “Firstly, it is expensive, you do not save the full amount that you pay in. Secondly, it is extremely non-transparent.”
**High deductions and low surrender value**
When Jan BĂĽhler checked his balance in July 2023 – almost ten years later – he was shocked at how little money he would get if he terminated the contract early. From then on, he stopped paying premiums. Jan BĂĽhler had paid in 3,600 francs every year and assumed that after 10 years he would have 36,000 francs, but only 23,322 francs were listed. What he didn’t know at the time was that he would be paid an additional 1,812 francs from the fund. His total was therefore around 25,000 francs.
The many deductions were also hefty. During the first three years, 135 francs per month were deducted for signing the contract. A total of 4,860 francs. “The additional 32 francs per month processing fee was the icing on the cake.”
**The rosy forecasts of the insurance companies**
Birgit Rutishauser, head of the insurance division at the financial market regulator Finma, criticizes the insurance companies’ overly rosy forecasts. From 2025 onwards, these must be more realistic: “We have asked life insurers to show bad scenarios that show the risk the customer is taking and that things can turn out worse than if you put money in a bank account.”
The financial market supervisory authority Finma will regulate such insurance products more strictly in the future. From 2025, all costs must be disclosed.
**Rude awakening in case of premature termination of contract**
At the age of 22, Ninja Versteeg was looking for a good savings solution. She explained to the estate agent that she wanted to save for the future. Her dream was to own her own house.
The tied pension plan, Pillar 3a with life insurance, is issued by Swiss Life. The term is 42 years. When she wanted to buy a house 14 years later, she had a rude awakening. She had paid in 46,759 francs. She could have withdrawn the balance early, but only 32,860 francs. That would have been 13,903 francs less: “I shed a few tears because I’m not getting the money anymore.”