Most frequently asked questions about swiss annuities (80 questions)
We recommend to carefully read and understand this section and your patience would be appreciated very much.
(i) What are insurance companies you work with?
We work with many swiss insurance companies located in Bern, Basel and Zurich for swiss annuities.
(ii) Why i have to subscribe to your services if i can directly contact the insurance companies to buy the policy?
It doesnt matter if you directly work with swiss insurance company or through us, it costs the same. We dont charge you either. Instead you will benefit with our expertise and experience. Very importantly, all insurance companies in switzerland would ask for a swiss advisor who must be domiciled in switzerland, especially if you are a foreigner purchasing the policy.
(iii) How do I make payment when I invest?
You can either send a personal check to the insurance company, or have your funds wired directly to the insurance company’s bank account. You will receive the direct bank coordinates of the swiss insurance company in the quotation. You can ask your home bank to do the currency conversion and then send payment to the insurance company or the insurance company's bank will automatically do the conversion based on the the current exchange rate.
(iv) What documents must I send with my application?
Notarized copy of passport, proof of origin of funds and occupation. The additional documents needed may vary with insurance company.
(v) Is there a minimum investment required to
purchase a swiss annuity?
(vi) What are your fee and charges?
We do not ask any fee from our clients as we are directly compensated by swiss insurance companies, which is why we do not provide any broker fee schedules. When you request quote, you will be shown net figures in your quotation and this is because under Swiss Insurance Law, insurance companies domiciled in Switzerland are obliged to show only the net figures in the quotations.
(vii) What are the returns?
The technical gauranteed interest rate (a guideline provided swiss financial authority FINMA) for swiss annuities CHF is 1.75%, EUR (2.5%), USD (2.75%), plus you will benefit from currency appreciation and bonus dividends. The returns of a annuity will take into account a number of variables like insured persons age, policy duration and others factors involved. We cannot provide approximate numbers and the actual figures will be given to you, when you request a quote.
(viii) How do i request a quotation online?
Please complete our online application and one of our representatives will get in touch with you by email or phone.
(ix) Is joint annuity possible?
yes, joint annuity is possible. We do not recommend joint annuities, if the age gap is too high (greater than 6 yrs) as the resulting payouts will be too low.
(x) Can i buy more than one insurance policy?
yes, it is possible to purchase more than one policy from different insurance companies.
No, we do NOT have offices or representatives US or in other countries. We are solely based in Switzerland and subjected to swiss laws.
(xii) Is it legal to transfer money to switzerland?
As long as your source of funds legitimate (free from any criminal activity) and pay taxes, you have nothing to worry about. It is perfectly legal to transfer money to switzerland from US or other countries as there is no exchange controls. If you are from US, you may have to report if you are transferring USD 10'000 or more.
(xiii) Is it possible to purchase a swiss annuity from IRA or 401k plan?
yes, it is possible to place a swiss annuity under your
retirement plans such as IRA/401k . You will need a US custodian (bank
or institution) who can accept swiss annuities. Not all US custodians
accept swiss annuities. We can give you the name of a reliable U.S. custodian
along with the quote.
(xiv) Is it possible to convert an existing US annuity to swiss annuity?
yes, it is possible.
(xv) How do i pay taxes on the earnings accrued in the annuity?
Upon written request, the insurance company will send you a statement showing principal and the earnings, which you can use it for filing taxes. We do not provide legal, tax advice to our clients. We ask you to consult a tax expert in your home country for professional advice with regard to filing taxes.
(xvi) Can i borrow against my annuity?
yes, upto 80% of the policy value
(xvii) Can i add funds to existing annuity at later point of time?
No. it is not possible, if you want you can buy a second annuity.
(xviii) How are the dividends paid out?
During the accumulation period on a deferred annuity, the dividends are re-invested into the contract. Once you start receiving annuity payments, the dividends (which are not guaranteed) are paid out to you.
(xix) How do i make partial withdrawals?
No. If you would like to make partial withdrawals, we recommend creating various annuities. In that way you can simply surrender one without having to surrender the total value of all policies.
(xx) What happens if i die or upon death of insured person?
If the insured person dies, the contract will be cancelled and the remaining value of policy will be paid to beneficiaries. If the policy holder (owner) dies before the insured person, then there is a possibility for the insured person to become the the owner.
(xxi) Can i make personal visit to Switzerland to discuss my requirements?
yes, infact we encourage our clients to come visit us
in Switzerland, for a personal discussion. If you are coming to Switzerland,
you will need to come to one of our partner office in Zug
(about 22 miles from Zurich). It takes about 15 mins by train. Please
contact us, so that we can arrange an appointment
1. What does a Swiss annuity offer?
A Swiss annuity is an innovative, currencyconvertible contract designed to fit the global diversification needs of today’s investor. The core of this investment is a single premium annuity that guarantees a fixed rate of interest over the coming years, plus profit-sharing dividends. It therefore belongs in your fixed-income portfolio. But for savers, it also provides excellent capital growth opportunities.
2. How does a Swiss annuity work?
Your investment is placed with one of Switzerland’s premier insurance companies. Your principal earns interest and dividends until you redeem your annuity in alump sum or start drawing an income (annuitizing). After income payments have begun, the unpaid balance ofyour capital still collects interest and dividend earnings that are paid out with your life income.
3. What are the upfront charges?
Swiss insurance companies are obliged by swiss insurance law to show quotations only on the net figures. Therefore the costs charged by an insurance company are not disclosed. However, you can better compare figures from different insurance companies based on net figures given to you.
4. Is there a minimum investment required to purchase a swiss annuity?
Yes. To purchase a Swiss annuity investment you will need to invest at least CHF 50,000 for fixed annuity and for Variable annuity, the minimum investment is CHF 1 million or equivalent in another currency to start.
5. Can I Increase my investment at a later date?
no, but you can buy a second annuity.
6. How liquid is my Investment?
Swiss annuities are very flexible investments. You can surrender your annuity at anytime.
7. When does my Investment mature?
You determine the duration of your contract at the time of purchase, but you are free to change it at any time during the contract term. That is, you may extend or shorten your chosen term (effective on the next anniversary date of your certificate) or withdraw the cash value of your investment at any time. This flexibility ensures that your investment matures when you need either the funds or the income.
8. Can I make other changes to my certificate at later date?
Of course. You can make changes to your certificate at your discretion as It relates to, for example, currency denominations, beneficiary clauses, and payment instructions. The only exceptions are the Person Insured. No special forms are required, simply send your instructions in writing to the insurance company.
9. Who should Invest in a Swiss annuity?
A Swiss annuity certificate provides such safety and flexibility that It makes good sense for almost everyone at almost any age.
10. How does a Swiss annuity minto my portfolio?
A Swiss annuity is a savings plan, i.e., a basic block for accumulating wealth and also a pension fund providing a guaranteed income for a specified period or for life. In addition, you can benefit from geographic and currency diversification as well as the asset protection features of a Swiss insurance policy.
11. How much can i invest In a Swiss annuity?
There is no upper limit, however some swiss insurance companies may require additional information for investments over CHF 300'000.
12. What about Swiss taxes?
As a non-resident of Switzerland, you are not liable
for any Swiss taxes. They accumulate tax-free and at maturity, are not
subject to the 35% Swiss withholding tax unlike traditional Swiss investments.
The technical interest rate is a guideline provided
by FINMA which indicates the maximum guaranteed return that an annuity
can offer to the client. As of Jan 1, 2010, the technical interest rate
for annuities denominated in CHF is 1.75%
Your annuity certificate starts earning interest the day your premium payment has been credited to the insurance company’s account.
17. Are profit-sharing dividends paid out or reinvested?
During the accumulation phase, dividends are automatically credited to the annuity principal. During the Income payment period, they are paid out together with the guaranteed income.
18. How do returns compare with other investments?
A Swiss annuity compares very favorably when you look
at the net return on other investments (i.e., return after deducting fees,
commissions, annual management charges, withholding taxes and income taxes).
Remember, with a Swiss annuity there are no swiss withholding taxes on
your annuity investment.
Recognizing the international investor’s interest in broad currency diversification, a Swiss annuity is offered in
• CHF - Swiss franc
Almost all swiss insurance companies offer policy in CHF/EUR currency.
20. Can I make switch between currencies?
Yes, depending on the insurance carrier, you can do a currency switch. With a Swiss annuity’s currency-convertible feature, you always have the option to switch currencies whenever you desire. Send a written request to the insurance company for the conversion. The insurance company may not act immediately and may take upto to five working days to complete the transaction as per policy conditions.
21. Is there any charge for switching currencies?
That depends on from one insurance company to other. Some charge a small fee while others deduct the fee from policy value.
22. Can I invest in more than one currency simultaneously?
This is possible with a variable annuity of minimum investment of CHF 1 million or more. A Swiss Fixed annuity policy can only denominated in one currency however;, you can create multiple policies in different currencies.
23. Why can't i choose the currency that offers the highest interest rate?
Not necessarily. In the long run, the development of
exchange rates could be a more decisive factor than interest rates. Such
factors as inflation rates, savings rates, fiscal balances, current account
balances and economic growth greatly affect the value of a currency in
the long run. A Swiss franc investment with a return of say, 4%,
24. What currency should I choose then?
Obviously It makes sense to choose a currency that provides consistently good growth in comparison to other currencies. The Swiss franc has been stronger than any other currency in the world over the past 25 years.
25. When should I convert my home currency into Swiss francs?
As with any investment, you should buy when prices are low. That is, use any temporary period of weakness in the Swiss franc to convert your money. If you prefer not to try to time the markets, buy a series of equally-valued certificates in your currency and convert them into Swiss francs at regular Intervals. In volatile markets, cost-averaging ensures that you won’t pay peak prices.
26. How soon can I expect to see currency appreciation?
With a long holding period, the long-term trends are what counts. It is next to impossible to pinpoint the exact week or month your investment currency will take off relative to other currencies.
27. What about inflation?
Inflation reduces your return on investment because the proceeds buy fewer goods than in previous periods. Since Inflation affects a currency’s strength vis-a-vis other currencies, investing in low-inflation currencies Is one way offset the loss of an Investment’s purchasing power.
28. What about the Swiss franc’s purchasing power?
Over the last 25 years, the Swiss franc’s appreciation would have offset more than 70% the loss through inflation in the US dollars buying power. The same general trend Is true with respect to other major currencies; the Swiss franc retained its purchasing power best of all. With,Switzerland’s continuing low inflation rates, the Swiss franc will most likely maintain its strong position against the dollar as well as other currencies.
29. Does the Insurance company Invest the different currencies (offered by a Swiss annuity) separately?
Yes. The different currencies offered by a Swiss annuity are invested and held separately. For example, for Swiss francs, the purchases for Swiss franc denominated annuity includes Swiss real estate, government bonds and other firstclass Swiss investments. Similarly, US dollar denominated investments are purchased for US dollar annuities.
30. how is the exchange rate set, when converting from my home currency or switching between currencies?
Your deposits are always converted to the selected currency according to the daily interbank exchange rate at the Swiss bank handling your payment.
31. Can I have my own bank convert my home currency into the Investment currency(ies)?
Yes. Your home bank can convert your home currency and make a Swiss franc or other currency transfer to Switzerland. However,experience has shown that this method is more costly (because of fees and less attractive exchange rates) than if you send your home currency funds directly to the insurance company and have them execute the currency exchange for you.
32. If I request a switch In currencies, how quickly this done?
Currency conversion is executed within five banking days
upon the insurance company’s receipt of your written request for
If you only have your money in domestic company stocks or mutual funds, your portfolio will invariably suffer heavy losses if your local stock market takes a plunge. So you need to diversify into other asset categories. Similarly, investing outside your own country is an important way reduce the risk of a collapse in asset markets your country. The Nobel Prize-winning Modern Portfolio Theory has proven that you can increase your overall return and reduce risk through diversification.
34. How much of my assets should I place in overseas investments?
There are no hard and fast rules for the amount you should invest abroad. While some experts suggest as much as 40% of your portfolio, a lot depends on your individual situation, such as when you need the funds or income from your investments, your tolerance for risk, and how view the prospects of foreign economies. For some individuals seeking asset protection possibilities, the percentage may be larger for “safe-in-any-case” nest egg.
35. How can I be sure that Switzerland is the right country to send my money to?
Switzerland has earned its reputation as the world’s foremost safe haven through over 700 years of democratic government, the country’s vowed political neutrality and respect for financial privacy.
36. How does Switzerland compare with other countries?
Switzerland has been consistently rated No.1 for political, financial and economic stability by the International Country Risk Guide.
37. As an overseas investor, how complicated to invest In Switzerland?
Establishing a swiss fixed annuity is as easy as mailing the completed paperwork to Switzerland with having your bank wire funds to swiss insurance company bank account.
38. Do you have any particular advice for those new to international Investing?
When taking the important first step abroad, safety should be your top priority. Invest in the safest investments and with secure institutions only.
39. Why are Swiss annuities a “better deal” than the traditional Swiss bank account?
Basically, Swiss annuities provide the international investor with approximately the same yield as Swiss government bonds yet are not subject to the 35% Swiss withholding tax on interest income charged to traditional Swiss bank accounts. For US based investors, Swiss annuities are not reportable as a foreign financial account to the Internal revenue Service (IRS). Interest is guaranteed. In addition, Swiss annuity certificates can provide you with asset protection possibilities in a simple and inexpensive way.
40. Is a Swiss annuity judgment-proof?
According to Swiss law, insurance policies - including Swiss annuities - when properly structured, are not attachable and cannot be included in any bankruptcy proceedings or be seized by creditors. This applies even if a judgment or court order specifically orders the seizure of your annuity or Its inclusion in the estate in bankruptcy settlement. Please refer to the legal opinion for a more in-depth analysis of judgments and bankruptcies.
43. Is there any age limits when purchasing a Swiss annuity?
No, but depending on the insurance company, there is a maximum age one can defer the annuity. When the owner of the policy reaches the maximum age, that policy owner must decide whether to redeem his/her investment or start receiving annuitizing income.
44. Can a Swiss annuity be held jointly?
Yes it can.
45. How many different parties can be Involved?
The purchase of an annuity certificate may Involve five different parties: The person, company or other legal entity who pays for the investment (premium payer or benefiical owner). The person, company or other legal entity who owns the certificate (applicant or policy holder). The natural person on whose life the figures are calculated (Insured person). The person, company, or other legal entity who gets benefits or receive the certificate value in case of death of the person insured (beneficiary). The agent/broker is usually your insurance agent domiciled in switzerland.
46. Why do I need to state investment duration?
According to Swiss insurance regulations, insurance companies must state in writing the exact amounts they guarantee. To calculate these amounts, the nvestment duration is required. You can later shorten or lengthen this period.
47. What procedure do I follow to redeem my Swiss annuity certificate?
To redeem your certificate, first return the original policy along with a payment-instruction letter to the insurance company. They will then send you a cash value statement of your policy. Sign and return this statement. After receiving the signed statement, the insurance company will proceed to make the payments as per your instructions. You may request a check or a bank transfer to a designated bank account.
48. How iong does this procedure take?
The entire procedure takes approximately four weeks. The redemption process can be accelerated by about 10 days if you authorize your Swiss representative to sign and return the cash-value statement on your behalf.
49. What happens at the end of the accumulation
50. How are annuity payments scheduled?
Annuity payments are available quarterly, semiannually, and annually. You can choose how you want the annuity payouts, e.g., by check to you or directly to a bank account anywhere In the world.
51. Can I borrow against my annuity?
Depending on the carrier, you can borrow against your annuity. Your Swiss annuity has an account value (cash value) that is at your disposal at any time. You can also use this value as collateral for a loan from the insurance company. There are some tax consequences and they should be considered when borrowing against your annuity. Please consult your tax advisor in your country.
53. Once I choose to receive a life income,
is there any charge for having my annuity payments transferred abroad?
54. What does it cost me when I take my money out of a Swiss annuity?
Nothing. There are no redemption fees when you cash in your Swiss annuity investment.
56. Can any future changes be implemented once I’ve made my Initial Investment?
Swiss annuities are extremely flexible. You may change the ownership, duration of the contract, beneficiaries and many other details.
57. Can I make partial withdrawals on my certificate?
No. We ask you create multiple annuity policies so that you can surrender one instead of making partial withdrawal.
58. What happens upon my death?
If, as in most cases, you are both the Person Insured and the Owner of the certificate, the certificate value is paid in a lump sum to the beneficiary(ies) you have named.
59. What If I am the Owner of the certificate but not the Person Insured?
Unless you have specifically designated another Owner in writing to the insurance company, the ownership of the certificate is paid to your legal or designated heirs according to your last will and testament.
60. Can a legal entity be the Owner of the certIficate?
Yes. Any legal entity such as a trust, corporation, pension plan, foundation or establishment can be the Owner as well as the Beneficiary of the annuity certificate. Refer to the legal opinion for an analysis of trust and corporation annuity ownership.
61. In the application for an annuity certificate, what does it mean to be the beneficial owner?
The beneficial owner is the owner of the funds that will be invested in the policy. As both owner and beneficial owner, you are not acting on behalf of another person to invest his or her funds. In case you are doing so, by law, insurance companies and banks are required to ask you who the beneficial owner Is.
62. Does my choice of owner affect the value of my Investment?
No. Whether the owner of the certificate is a person or legal entity (pension plan, trust, corporation, etc.), the certificate value remains the same.
63. Does my choice of the person Insured affect the value of my investment?
No, the insured person does not have an effect on the valuation of the investment (interest rate and dividends). However, the insured person will have an effect on how long you can defer the annuity payments because insurance companies typically have a maximum deferral age.
64. Am I protected against future exchange controls?
Although exchange controls have existed in various countries and may be reintroduced one day for people who hold overseas bank accounts, these have never been applied to foreign annuities. It seems unlikely that a country would force repatriation of foreign annuities in the future.
65. What happens If I move to another country?
Your Swiss annuity certificate remains valid regardless of where you live.
66. How private is my investment?
Swiss law forbids the disclosure of assets held by an individual in a Swiss bank or insurance company to any person or government authority.
67. What should I do If I lose my Swiss annuity certificate?
If the policy becomes lost, mislaid or stolen, notify the insurance company immediately in writing. They will then issue a “Declaration of Loss”, which requires your signature. This declaration replaces your original policy. If your original policy turns up, you should advise the insurance company again in writing.
68. Can the guaranteed rate of interest ever be changed?
No. It can’t. You are assured to receive the guaranteed interest rate for the life of your annuity certificate.
69. Can I have the Life income payments from my annuity certificate paid into a bank account outslde my home country?
Yes. You can. Simply send your instructions in writing to the insurance company.
70. Can I find out the value of my certificate whenever I need to?
Yes. You can request information about your certificate’s value anytime.
71. When do I receive my account statements?
you will receive a full account statement at the end of the year and if not you have instruct your insurance company to send yearly statements on earnings.
72. How closely do I need to monitor my investment?
Since you are guaranteed a certain rate of growth in
terms of the currency you have chosen and will additionally receive profit-sharing
dividends, the value of your investment in that currency does not fluctuate
as with stocks, bonds, etc. But the currency in which your Swiss annuity
certificate is denominated will rise or fall against your home currency.
So your choice of investment currency matters, particularly in the long
The Swiss insurance law requires swiss insurance companies to segregate client funds from their operating costs. The insurance carriers recommended have consistently maintained careful control over their balance sheets and are in impeccable financial condition. They represent some of Switzerland’s oldest and biggest life insurance companies, stable and long-term oriented.
74. How can I be sure my Investment is safe?
In the more than 150-year history of the Swiss insurance industry, there has never been a single failure of a Swiss insurance company in meeting client obligations. Policy holders in Switzerland enjoy a level of security and protection greater than in any other country.
75. Is an Independent general rating of Swiss Insurance companies available?
No. Swiss insurance companies are not analyzed by the well known rating companies. In any event, only five insurance companies have special policies for the international investor, and all of these are either old, established blue-chip companies or are owned by one.
76. Are Swiss insurance companies regulated?
The insurance sector is well regulated and under supervision of FINMA which oversees the proper functioning of insurance sector. Federal regulators require that life companies fully cover their obligations with secure investments and sufficient cash flow.
77. How many Swiss insurance policies have been defaulted on?