Swiss Fixed Annuity Plan

A Swiss fixed annuity has all the features one could wish for in a long-term investment. With a Swiss fixed annuity, your money is protected from inflation and tax erosion. In addition, the investor benefits from a life income guarantee once the income option is chosen. It is therefore a savings plan and a pension fund all in one. Fixed annuities issued by a swiss insurance company, are primarily for those who do not want to take risks on losing their deposits.

Fixed annuities, guarantee a minimum fixed rate, while holding the capital. The insurance company guarantees a periodic payments for lifetime or for a fixed term. You may chose when you want to receive payments, either immediately or after some time frame (deferred annuity).

The safety and security of Switzerland have been for generations of investors seeking financial refuge.

and the policy duration can be `fixed term` or `lifetime`. The significant advantage of lifetime option, is the insurance company will continue to make payments, even after the depletion of initial deposit. You may wish to accumulate earnings and prefer to receive periodic payments after certain number of years.

Immediate Annuity

Immediate annuity - most commonly known as retirement income annuity, are the most preferred option among senior citizens to receive their retirement income, almost immediately after paying the premium to the insurance company. You may chose a with or without refund option if you are planning on taking lifetime payments, as this contributes significantly to your earnings.

** Please note that `without refund` option is only possible with lifetime annuities. As of fixed term annuity `with refund` is always written in the contract, just to avail the death benefits.

Deferred Annuity

With deferred annuity, you chose when you want to receive payments, for a specific fixed term. For example, you want to invest USD 100'000 as premium now and want to receive your income after 10 years. During the accumulation stage, the principal grows with compounded interest including dividends plus currency gains. This works best if you have a future planning like education for grandchildren, income for your wife or parents after certain number of years. If you want to cancel the annuity, it is recommended to `with refund` option written in the contract.

Swiss insurance companies are not allowed to report the purchase of an annuity certificate to anyone, private persons or government authorities. This means that the purchaser is solely obliged to report and pay taxes.

Swiss fixed annuities can be used as an `asset protection vehicle`, if you have named the beneficiaries as irrevocable. As per article 80/81 of the swiss insurance law, the annuity is safeguarded against debt-collection or creditors or bankruptcy proceedings from a foreign country.

You may choose to receive an income for life which ensures that you will receive payments for your entire life, even if your principal investment is depleted. In case of death prior to depletion, the residual value in your annuity
is paid to the beneficiaries.

Swiss annuities are available in Swiss francs (CHF), U.S. dollars (USD) or the new European currency, euros (EUR). You choose the denomination of your annuity, retaining the right to switch currencies at any time during the accumulation period. Therefore, you have the flexibility to adjust your currency allocation according to longterm currency trends.

For US Citizens

The information below may not be interpreted as legal or tax advice before making an investment decision. We do not provide legal, tax advice to our clients. Please consult your tax expert in your country for more information.

It is possible to 1035 tax free exchange from your existing US policy to a swiss annuity.

It is possible to purchase a swiss annuity and can be held within your IRA on certain conditions. It can also be from a Keogh plan, corporate plan or 401k plan from a US custodian (bank or institution) qualifying for such plan.

IRS requires you to file Form 720 for 1% excise tax (which is 1% of premium paid) if you buy a foreign held annuities. But the recent tax treaty with switzerland eliminates this tax. But Form 8833 Treaty-Based Return Position Disclosure Form has to be filed to claim the treaty benefits. The excise tax is not exempt for annuity contracts purchased from insurance companies in Liechtenstein.

Swiss fixed annuities DOES NOT qualify for tax deferral because it guarantees to pay certain sum (debt instrument). The swiss annuity contracts are treated like any other US annuities, in which case interest and dividends on U.S. annuities are tax-sheltered until withdrawn, while swiss fixed annuities are taxable each year as ordinary income. If you want, the insurance company in switzerland will give you yearly statement on earnings and interest accrued to file your taxes. Please consult the tax advisor in your country.

you should buy when the price is low, that is, use any temporary period of weakness in the franc to convert your dollars. Or you can purchase a Swiss annuity certificate in US dollars and wait until it's the best time for you before switching into francs. Just remember, with a long holding period, the long-term trends are what count. Better yet, buy a series of equally-valued certificates in dollars and convert them into Swiss francs at regular intervals. In volatile markets, dollar cost averaging ensures that you never pay peak prices.

If you are the insured person, and upon death the surrender value of the contract is paid immediately to your designated beneficiary. It should be claimed by the beneficiary, upon presenting original policy and death certificate. Incase of joint annuity, the insurance company will continue to pay the income until the death of surviving annuitant.

A beneficiary is the legal entity or person who gets the benefit of the policy. You can name the beneficiary revocable or irrevocable and name them separately in case of death or survival and for receiving benefits.

The following numerical example illustrates the growth of your investment during the accumulation period. Assume that you are a 45-year old male investing CHF 100,000. The accumulated value of your annuity after 20 years, at age 65, would amount to CHF 179,281. For a 100,000 euro investment, it would anmount to EUR 230,685 and for USD 100,000, you will get USD 247,820.

The table below shows the development of a Swiss annuity denominated in Swiss francs, Euros, and US dollars. The tables are meant to illustrate the benefit you may expect from a Swiss annuity. Differences according to age and gender may occur. The figures for "guaranteed capital value" include guaranteed interest earnings. The total value includes profit sharing dividends. Dividend earnings are based on the custodian's calculations and are not guaranteed for the future.

At the End of year	CHF Investment		EUR Investment		USD Investment
	Guaranteed capital value	Total value Including dividends	Guaranteed capital value	Total value Including dividends	Guaranteed capital value	Total value Including dividends
1	100,293	100,997	100,293	102,405	100,293	102,874
2	101,144	102,597	101,144	105,502	101,144	106,471
3	102,053	104,302	102,053	108,801	102,053	110,300
4	104,522	107,617	104,522	113,807	104,522	115,871
5	107,054	111,046	107,054	119,032	107,054	121,694
6	109,648	114,593	109,648	124,484	109,648	127,780
7	112,307	118,262	112,307	130,171	112,307	134,141
8	115,033	122,057	115,033	136,105	115,033	140,787
9	117,827	125,983	117,827	142,295	117,827	147,732
10	120,691	130,045	120,691	148,752	120,691	154,987
11	123,627	134,247	123,627	155,487	123,627	162,567
12	126,635	138,594	126,635	162,511	126,635	170,483
13	129,720	143,092	129,720	169,837	129,720	178,752
14	132,881	147,746	132,881	177,478	132,881	187,388
15	136,121	152,562	136,121	185,445	136,121	196,406
20	153,578	179,281	153,578	230,685	153,578	247,820

After the accumulation period, at age 65, you may expect the following annual income for life:

* Depending on the developmnent of the exchange rate versus your "home" currency, the income may be even higher.

Immediate Annuity

Deferred Annuity

For US Citizens

SWISS FIXED ANNUITY PLAN