Sound financial planning begins with protecting yourself and your family from financial liabilities that may arise due to unforeseen circumstances. As an expat in Switzerland it can be even more daunting to get this right on top of your relocation to a new country. The information below is intended to improve awareness of the insurance policies available to you after your move and how these will help you create a sound financial plan for the future.
Life insurance is important regardless of whether you are currently supporting a family or not. Life insurance solutions are increasingly being implemented as part of an asset protection, tax planning or financial planning initiative by most individuals.
There are two kinds of insurance offered by providers. These include:
Endowment Insurance- is a form of life insurance that combines insurance coverage with wealth accumulation. You can also benefit from tax privileges offered by life insurance.
Annuity Insurance – is a form of life insurance that ensures you get a fixed, regular income for as long as you live – and is an ideal way to top up the pension payments from the state AHV scheme as well as your occupational pension fund.
Life insurance can be useful to you in several different ways:
(a) Mortgage protection:
Buying a home is a big life decision which will almost certainly have long-term financial implications. Through unforeseen events such as accidents, extended illness or in the event of death, unexpected financial hardship may result. It is vital that you think about planning for your retirement and insuring your partner and family, too, when you buy your own home.
If you decide to insure your mortgage with life insurance consider taking a term life insurance. This can be used to pay off an outstanding mortgage balance. Just select a term that matches the length of your mortgage payment period. Some companies even offer decreasing term insurance, which means the death benefit decreases along with your mortgage balance.
(b) Income replacement:
Life insurance can also be used as a means of income protection by making the requisite provisions with incapacity or term insurance. Both types offer a great deal of flexibility, as you can customize your risk protection. Benefits include:
- Individual pension provision in the event of death or incapacity to work
- Protection for your spouse or domestic partner and security for your family
- Ensures the continuation of your business
- Provides tax advantages with pillar 3a
(c) Education funding:
Life insurance can help fund a college education. In the event of your death benefits may be invested and potentially grow to the needed amount by the time your children reaches college age. Feel better knowing that you helped prepare for their future – even if you are not there to see it.
Plan early and don’t put off taking a life insurance with your preferred provider. Not only do you stand to reap immense benefits, but the younger you are when you take a life insurance policy, the lower the cost you will incur and the easier it is for you to get approved by insurance companies because in their perspective a healthy 32 year old is a much better customer than a 48 year old smoker.