Is life insurance a good investment when interest rates are low?

The low interest rates in Switzerland make it difficult to invest money profitably. Could life insurance policies be the solution? Can you get a better return with Swiss life insurance policies than Swiss savings accounts?

Hi there,

Typically, Swiss life insurance policies which allow you to accumulate cash value are generally based on either 3a or 3b retirement savings and use either the "mixed life insurance" insurance model (a form of permanent life insurance) or the life annuity model. The interest earned on capital-building life insurance policies in Switzerland is generally similar to that earned through Swiss savings accounts and Swiss retirement accounts.

However, they are much less flexible than bank accounts. An insurance policy is a contract with a contract term. If you exit the contract before the end of the insurance term, you will generally be paid out a cash value lower than the sum of insurance premiums paid.

As a general rule, using separate savings/investment solutions and term life insurance makes more financial sense.

Best regards from Moneyguru

More on this topic:
Life insurance comparison
3a retirement account comparison

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