Present value
The present value is the value of the total premium payments over the agreed term of the insurance contract. A fixed percentage is used for the calculation, over which all future payments can be discounted at any time.
The present value shows how much money has to be invested so that the premiums still in the future can be paid, whereby this calculation assumes a constant interest rate. The method is the basis for comparing different insurance products from different providers.
beneficiaries
Beneficiaries are the persons named in the insurance contract and who receive the agreed benefits in the event of the insured event occurring. In the event of the death of the policyholder, life insurance can take the form of a one-off payment or a regular pension payment, whereby the type of payment must be contractually agreed in advance.
Beneficiaries can be different people who can be freely determined. The beneficiaries can be changed during the term of the contract, it does not have to remain with the originally named persons. There is one restriction, however, if life insurance is carried out under the 3a pillar, the beneficiaries cannot be changed easily.
policy reserve
Of the premiums that go into the Life insurance Switzerland are paid in, administrative costs will be charged. These are freely defined by the insurer and can relate, for example, to the agency commission or to the administration of the policies. The remaining amount is the savings part of the premiums. This in turn earns interest and accumulates over the course of the contract period. One then speaks of the so-called cover capital. The capital is also a provision and is intended to help secure future liabilities or to be able to settle them later. The reserve capital is therefore usually lower than the premiums paid.
scope of coverage
The insurance contract describes benefits that are to be paid out if the insured event occurs. These benefits are paid to the beneficiary. They are also known as the scope of coverage. In the case of life insurance, the scope of coverage can therefore relate to one-off payments in the event of an insured event or to monthly pension payments if these have been contractually agreed.
Entry age at the start of insurance
The insurance policy speaks of the insured person's entry age. It is the actual age of the person who is insured here. Life insurance policies are usually limited in this regard and no longer provide old people with an insurance contract. The maximum age is often 60 years, in some cases 65 or 70 years is the maximum possible age. At the same time, there are downward restrictions on life insurance policies, usually requiring majority of majority. In the case of insurance that pays into the 3a pillar, the age limit of 16 to 18 years applies, which depends on the respective insurer. In the case of death insurance in the 3b pillar, on the other hand, the prescribed entry age is lower.
The age of entry is of great importance for determining the amount of the premium, because the older a policyholder is, the higher the premiums that he has to pay. This in turn means that very young and healthy policyholders are faced with comparatively low premiums. The premiums are also calculated from other factors, including the gender of the policyholder, the agreed sum insured, the desired term of the contract and various health factors (smokers, athletes, overweight people, etc.).
Unit-linked life insurance
On the one hand there is the classic risk life insurance that covers the risk of death and, depending on the contract, the risk of disability. On the other hand, there is unit-linked insurance, which also enables capital to be saved. The savings portion is linked to an investment fund or the savings portion is based on the course of the investment price. The unit-linked insurance is therefore more risky, but also offers the chance of a higher return and thus a higher benefit in the insured event of damage. The policyholder chooses from a wide range of products in which investment fund he would like to invest. There is still a risk of loss here, but it is limited by various safety precautions.
Guaranteed sum insured
A guaranteed sum insured is stated in the insurance contract. This is the sum that is paid out in any case if the insured event of damage occurs. However, the sum insured can increase if the insurance company has a great financial success. Since the policyholder participates in the insurance company's profit through the profit sharing, he also benefits directly from success and thus from higher returns. In the best case, these ensure that the insurance sum paid out is significantly higher than the guaranteed insurance sum that was agreed in the insurance contract.
Mixed life insurance
The mixed life insurance is a combination of different insurance components. On the one hand, this provides the financial security of the surviving dependents in the event of death, and on the other hand, the disability can also be insured. In addition, it is possible to include a savings portion through which the creation of an asset is possible. At the end of the contract term, the agreed amount will be paid to the policyholder. He then receives the saved amount, which consists of premiums, interest and profit sharing.
The main advantage of mixed life insurance is that the insured person can determine who the beneficiary is in the event of his death. The inheritance law must be observed! The disadvantage is that if the contract is terminated prematurely, a loss must be factored in because the surrender value is less than the amount actually currently in the contract. Furthermore, the surplus share increases the saved capital, but the exact amount of the surplus share cannot be guaranteed and can therefore be unexpectedly low or very high.
Life insurance 3a
Life insurance 3a is a tied pension plan, which may also include life insurance. The policyholder can benefit from the tax advantages here. Important: In the event of the policyholder's death, inheritance restrictions apply when it comes to paying the insurance benefit to beneficiaries. This is an important difference from a 3a account.
Fixed premiums are payable each year throughout the life of life insurance 3a, although early termination is possible, but this entails considerable financial losses. You should therefore carefully check the surrender value of the life insurance policy before the planned termination or termination. Also important: The return on 3a life insurance is significantly reduced if administration fees have to be offset.
Dissolve / pay out life insurance
If it is a risk life insurance, the amount paid out upon termination is very small or nonexistent. The reason: No money is saved here that would be available for payment again. In the event of cancellation of insurance, only a small credit can be paid out, if there should be any from profit sharing. The surrender value of the insurance is decisive for the amount that can be paid out.
Cancel / change life insurance
It is possible to cancel the life insurance policy, but this is usually associated with a financial loss. The insurance companies therefore protect themselves against frequent and rash layoffs. In the case of life insurance that is run as risk insurance, termination or termination is usually possible after the first year of insurance.
Switching from one insurance company to the other is only possible through the buyback, which entails financial losses: however, fees have to be deducted from the amount that has been paid in, because the insurer usually retains these, but charges them from the first premium. This means that only that part of the paid-in premiums that is left minus the fees will be paid out.
Life insurance risk assessment / health assessment
If you want to insure yourself against certain risks in a life insurance policy, you must have a health check carried out. It is important for the insurer what health status the insured person has at the time the contract is concluded, because this will make the scope of an insurance policy clear. The health check usually takes place by answering individual questions in a questionnaire. This form is filled out by the person to be insured and must be signed by the person to be insured. A more detailed examination takes place if a very high sum insured is to be agreed or if there are already health concerns. Then the treating doctor is usually interviewed or a medical opinion is requested. To do this, however, the doctor must be released from his duty of confidentiality.
Nachversicherungsgarantie
The post-insurance guarantee is an advantage for the policyholder, who can have additional benefits included in an existing contract. It is also possible to improve the terms of the existing contract or to adjust the insured benefits upwards. Some insurers offer to increase the sum insured later without having to carry out a new risk assessment.
Waiver of premium
The insured has the option of being exempt from paying his premiums. This is possible, for example, if you become disabled. He is then no longer able to raise the premiums, which is taken into account from the outset when the contract is concluded. However, the insurance value can decrease because many insurers only pay part of the premium or even the entire premium if a previously defined degree of disability has been proven. Without this evidence, the value of the insurance will remain at the level it was at when the premium exemption began.
premium warranty
At the start of the insurance contract, the insurance company offers a fixed premium that remains in effect for the entire term of the contract. The premium guarantee does not depend on how successfully the insurer operates and what financial success he achieves himself.
product feature
An insurance product always has certain key features that are referred to as the product expression. Death insurance, for example, differentiates between a constant and a decreasing sum insured as a product. The constant sum insured is determined from the beginning and remains at this sum over the entire term of the contract. A change or adjustment is not possible. With a decreasing insurance sum, on the other hand, the sum is fixed at the beginning, but then the amount decreases annually. This is the case, for example, with risk insurance policies that secure a loan. To the extent that the loan amount is reduced, the insurance amount is also reduced.
rating
A credit rating is used to assess the creditworthiness of a company or a private individual, whereby an independent institution must carry out this rating. Insurance companies are also subject to a rating. This is used to make one company financially comparable to another and to establish a certain ranking. Ratings can also be an indicator of a company's probability of default or insolvency. A distinction is usually made between a very low default risk (AAA), a very low default risk (AA +, AA, AA-) and security that exists when the industry or the overall economy is not influenced by certain events (a +, A , A-). If problems are to be expected if the economic situation deteriorates, the letters BBB +, BBB or BBB- are assigned. This is followed by the BB + rating if there is a risk of default. The letter rating comes from the agency? Standard and Poor? S? and is generally used for a rating.
risk Disclosure
Insurers are trying to protect themselves too and are taking various hazards out of a contract. This means that if such a circumstance occurs, no liability is possible and the insurer does not have to provide any benefits. This is known as risk exclusion, one of the most important means of limiting liability risks for the insurer.
If death insurance is taken out, the risk of suicide is usually removed from the insurance. This can be the case for the entire term of the contract, but it can also refer to a predefined period (e.g. three years). If the policyholder kills himself within this time, the surviving dependents will no longer receive any insurance benefits and the sum insured will not be paid out. Other insurers do not completely take a risk out of the scope of benefits, but only insure certain risks with a lower coverage amount. Again there are restrictions, because if z. For example, if the suicide was committed in a state of demonstrable mental disorder, the insurance company must be liable. In this regard, the general insurance conditions must be read very carefully before a contract is signed, because such a risk exclusion also applies to other risks to be insured.
Buyback ability
Not every insurance policy is redeemable. It only has this property if it also has a surrender value. In this case, the policyholder can terminate the policy prematurely and have the previously saved amount paid out. This is calculated from the premiums paid minus all fees.
Cash surrender value
If the policyholder requests payment of his life insurance, this is only possible at the currently applicable surrender value. This represents the value of life insurance at a fixed point in time. The amount of the surrender value depends, among other things, on the previous term of the contract, on premiums paid and deductible closing fees. Insurance companies once again differentiate between guaranteed surrender values and surrender values with surpluses. The latter depend on how the insurer's business results looked last year. Before taking out life insurance, you should therefore also compare the closing and administrative costs, as these significantly reduce the surrender value if the insurance contract is terminated prematurely.
retirement age
The final age for life insurance is the age of the policyholder or the insured person when the end of the contract term has been reached. It is also known as the final age and represents, for example, the time at which the agreed benefit is due in the case of a life insurance policy. With 3a life insurance, the final age is often set at 64 for women, for men it is 65. This corresponds to the final age with the current standard retirement age. In contrast, in the case of death insurance in 3b provision, the final age is significantly higher and is usually between 75 and 80 years.
Tax life insurance
Both the 3a and 3b pillar payments offer tax advantages. When paying into the 3a pillar, the premium to be paid can be deducted directly from taxable income, for which there are certain maximum amounts. Anyone who is in a second pillar occupational pension scheme can deduct a maximum of CHF 6,682. For all others, the rate of 20 percent applies, which can be deducted as a maximum. At most, it can be CHF 33,408 here. On the other hand, a lump sum is claimed for a payment into the free pension plan.
In the case of a death insurance policy that is part of the tied pension plan, no taxes are incurred during the term. In the case of the 3b pillar death insurance, wealth and withholding taxes are payable; under certain conditions, income taxes also apply.
If it is a mixed life insurance with capital formation, the benefits in the bound pension plan must be taxed as income, for which a special tax rate applies. The payment of the insurance amount in the free pension plan is tax-free. However, certain conditions apply.
Technical interest rate
The so-called technical interest rate is used to calculate the premiums for life insurance. It can also be found in the insurance contract. The upper limit of the technical interest rate can change, it is redefined from time to time by the Swiss Financial Market Supervisory Authority and then used by the insurance companies in Switzerland. A technical interest rate, which was used when the insurance contract was concluded, applies for the entire term of the contract and will not be adjusted later.
The technical interest rate can be used to calculate the present value of the insurance, which in turn gives the opportunity to determine the amount of future death benefit. It is therefore possible to precisely determine the capital to be paid out when the death occurs. In the case of a life insurance policy, the interest is paid not on the premium that is paid in, but on the risk premium that results from the amounts paid in minus the cost premium. The cost premium in turn includes fees and administrative costs. The risk premium is the amount that represents the insured person's credit once all costs have been deducted from the premiums paid.
death
If the insured person dies within the term of the insurance contract, this event is considered a death in terms of insurance. The insurer must now be informed immediately. He usually requires an official death certificate and a certificate of the cause of the death. If it is an accident death, the police report is often used to prove the death or to clarify the cause.
The insurer must then clarify the eligibility. The clarification of eligibility can take a long time, especially in cases where several beneficiaries have to be taken into account. Only when all the necessary documents are available can the insurer provide the contractually guaranteed benefit. He has four weeks to do this. In most cases, however, the payout is much faster.
Death benefit
The sum insured, which is determined at the beginning of the insurance contract, corresponds to the so-called death benefit. The amount defined here is paid to the beneficiary when the loss event occurs (death of the policyholder).
conversion value
Each insurance policy has a countervalue, which is called the conversion value. It can be used to convert the insurance into an insurance that is exempt from premiums. The transfer to a completely different insurance product is also possible at the conversion value. Many insurers equate the conversion value with the surrender value.
Profit sharing
If the insurers generate a surplus in the insurance year, the insured participates in it. The profit sharing is considered an additional insurance benefit and is added to the guaranteed sum insured. Most insurers tend to calculate their profits carefully, so profit sharing is often surprisingly high. Changes in mortality, low overall costs or a good interest rate development have a positive effect.
insurance
A fixed sum of benefits is defined in the insurance contract, which is referred to as the sum insured. This sum is used to assign an amount to the insurer's benefit, which is the maximum amount. In the case of constant death insurance, the sum insured in the event of damage is paid to the beneficiary. With a decreasing death insurance, on the other hand, the amount that the beneficiary receives in the event of a claim decreases each year.
Life insurers generally have a minimum amount, which is to be defined as the sum insured and which often amounts to 10,000 Swiss francs. In some cases, the insurance sums are capped, and some providers also offer free insurance sums.
Contract duration
A certain period of time for which insurance cover applies is set for an insurance contract. In insurance, this period is called the term of the contract.
Contract period
The term of the contract is also referred to as the term of the contract and means the period of time that is relevant for insurance protection. Most insurance companies can choose their term, but there are certain limits that relate, for example, to age. The minimum terms are short and only amount to a few years, while the maximum terms are usually between 10 and 35 years.
The contract term should be adjusted so that it corresponds to the purpose of the insurance. Risk life insurance is therefore only taken out for the duration of the period in which the risk in question also exists. If there are small children in the house, life insurance will usually only have to exist until the children are likely to have their own income.
If the insured event occurs within the term of the contract, the beneficiaries receive the agreed cash benefit. If the insured event of damage does not occur, the contract ends on the intended date.
Withdrawal
The policyholder is granted the right to cancel the insurance contract within a period that has been contractually agreed. The cancellation is not to be confused with the cancellation!
Usually, a period of seven or fourteen days is provided as the cancellation period, the exact period is stated in the insurance contract and here in the general terms and conditions. In order to safeguard his rights, the policyholder must send a letter to the insurer by registered letter with the contract and his application. It is important that the letter is received by the insurer within this period, the date of the postmark is not relevant.
