What is life insurance?
In Switzerland, life insurance is a provident contract which can cover death, incapacity to earn or the accumulation of capital. It is often integrated into the 3rd pillar, either in linked pension provision 3a or in free pension provision 3b.
Not all life insurance policies pursue the same objective. Some only protect your loved ones in the event of death. Others combine protection and savings. Still others invest part of the premiums in funds to seek a higher return, with possible fluctuations.
The main types of contracts
- Pure risk: covers death or incapacity to earn for a specific period, without significant savings. It is often the most effective solution to protect a family or a mortgage at a lower cost.
- Mixed life insurance: combines a capital in the event of life at maturity and a capital in the event of death during the duration of the contract.
- Fund-linked life insurance: invests part of the savings in funds, with potential return but also market risk.
- Insurance with premium release: the insurer continues to finance the contract if you become unable to earn your living, according to the conditions.
- Life annuity: transforms capital into regular income, according to a retirement security objective.
Pillar 3a or pillar 3b?
Pillar 3a offers an immediate tax advantage: payments are deductible within the legal limits. In 2026, the ceiling is CHF 7,258 for people affiliated to a pension fund and 20% of net income, a maximum of CHF 36,288, for people without a 2nd pillar. In return, the capital is linked until retirement, except in cases of early withdrawal provided for by law.
Pillar 3b offers much more freedom: duration, amount, beneficiaries and availability of capital depend on the contract. It is often relevant for cohabitants, estate planning, heritage projects or protection which does not have to follow the strict legal order of 3a.
Bank or insurance: the right choice
A 3a bank account or deposit is generally more flexible and often less expensive. Life insurance, on the other hand, provides risk coverage: death benefit, incapacity to earn, release of premiums, designated beneficiaries or savings discipline. The right choice depends on your priority needs: yield, taxation, family protection or contractual security.
Who is it useful for?
- Families who want to guarantee capital in the event of premature death.
- Homeowners who wish to secure a mortgage.
- Self-employed with limited or no LPP protection.
- Cohabitees who want to freely designate a beneficiary via pillar 3b.
- People who want to combine retirement savings and earning incapacity cover.
- Entrepreneurs who want to protect an associate or business partner.
Points to check before signing
- Main objective: protection, savings, taxation, transmission or combination.
- Fees and surrender value: a redemption during the first years can result in a significant loss.
- Duration and flexibility: possibility of reducing, suspending or adapting premiums.
- Beneficiaries: legal order in 3a, broader freedom in 3b.
- Investment risk: guarantees, funds, surplus participation and investment horizon.
- Health questionnaire: complete responses to avoid a reduction or refusal of service.
Our support
Finwise clarifies your objective, compares 3a and 3b solutions, evaluates fees, guarantees, taxation, surrender value and beneficiaries. We help you separate what should be insurance and what can remain bank savings or a more flexible investment.