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Old 10.11.2019, 17:00
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how to exit my Pillar 3A insurance policy smoothly?

Apologies if this post disturbs anyone, I would be grateful if anyone can advise me what to do now to minimize my loss.

I did a search on the Forum about 3A and have read a few discussion threads, especially the one from Las, my situation looks kind of similar.

I have bought 3A at Axa Winterthur since 2016 and paid 3 annual premiums of 6.8k CHF.
Life insurance Protect Plan
Contract
Policy dated: 24.10.2016
Beginning of the contract: 01.11.2016
End of the policy: 01.11.2051
Pension type: tied
Premium rate: CHF 6’798.00
Payment method: Annually
Value
Calculation date: 10.11.2019
Surrender value: CHF 11’641.00
Redemption value of bonus: CHF 484.00
Policy pledged: no

The table of “technical values” is attached.
I think not paying premium in the first 5 years will lead to the ending of the contract and policy. 2019 premium is due and the deadline to pay is end November.

1.When I signed the contract in 2016, the salesman confirmed to me that I will be able to withdraw my money if I leave CH or buy a house, WITHOUT specifying that I can never withdraw the amount I paid. Do you think this act of hiding information can be used to sue them to get a full refund as information was not given in a transparent way? Or legally they are not at fault at all or very difficult to win against them?
2.It seems that if I close my AXA 3A without buying a 3rd pillar at bank, I have to give back the tax saving I have had?
3. Therefore what is the best action I shall do now to minimize my loss? AXA advisor tells me that if I close my account now, I will only get back the 12k (11641+484), which means I will have 9k incurred loss.

Thanks a lot for your time
Attached Files
File Type: pdf technical values-.pdf (350.5 KB, 54 views)
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  #2  
Old 10.11.2019, 17:06
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Re: how to exit my Pillar 3A insurance policy smoothly?

You bought an insurance and unfortunately the first years are a ‚loss‘ due to the costs. Very normal.
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Old 10.11.2019, 17:45
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Re: how to exit my Pillar 3A insurance policy smoothly?

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You bought an insurance and unfortunately the first years are a ‚loss‘ due to the costs. Very normal.
Never use an insurance contract for investment purposes, it's primary use id protection of some kind, this protection & salesman's salary need to be paid, he probably only finds 1 or 2 mugs a month.
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Old 10.11.2019, 17:58
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Re: how to exit my Pillar 3A insurance policy smoothly?

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1.When I signed the contract in 2016, the salesman confirmed to me that I will be able to withdraw my money if I leave CH or buy a house, WITHOUT specifying that I can never withdraw the amount I paid. Do you think this act of hiding information can be used to sue them to get a full refund as information was not given in a transparent way?
No.
The conditions of the insurance will be specified in the contract and/or the related rules. It is up to you, as a customer, to ensure you understand those before you sign.

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Or legally they are not at fault at all or very difficult to win against them?
Yes. They are not at fault.

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3. Therefore what is the best action I shall do now to minimize my loss? AXA advisor tells me that if I close my account now, I will only get back the 12k (11641+484), which means I will have 9k incurred loss.
The least loss-ful course of action now is probably to continue the insurance. At least for those first minimum years until it breaks even.

There are certain conditions under which you can legitimately close it. They will be specified in the rules, and may include such matters as emigratIng or becoming disabled.

In the meantime, you might like to check how much of your premium is covering risks and how much is towards savings. It may be possible to adjust this ratio.
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Old 10.11.2019, 21:20
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Re: how to exit my Pillar 3A insurance policy smoothly?

Thanks a lot for replying me point by point doropfiz.
it seems that my policy will never reach break-even, as per the attached table and also the concensus among discussions on this forum, especially this thread..
https://www.englishforum.ch/insuranc...verything.html
BTW what about my 2nd question?


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No.
The conditions of the insurance will be specified in the contract and/or the related rules. It is up to you, as a customer, to ensure you understand those before you sign.


Yes. They are not at fault.



The least loss-ful course of action now is probably to continue the insurance. At least for those first minimum years until it breaks even.

There are certain conditions under which you can legitimately close it. They will be specified in the rules, and may include such matters as emigratIng or becoming disabled.

In the meantime, you might like to check how much of your premium is covering risks and how much is towards savings. It may be possible to adjust this ratio.
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Old 11.11.2019, 08:56
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Re: how to exit my Pillar 3A insurance policy smoothly?

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No.

The least loss-ful course of action now is probably to continue the insurance. At least for those first minimum years until it breaks even.
Short of dying I suspect not, probably better to write off the loss now, the returns will be poor going forward, break even is many years away.
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Old 11.11.2019, 09:51
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Re: how to exit my Pillar 3A insurance policy smoothly?

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Short of dying I suspect not
As macabre as it is, it is the option which gives the highest return.

@neutralname Why did you choose a life insurance pillar 3a product over a bank account or funds product in the first place? Do you have family and kids which could profit from it?
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Old 11.11.2019, 10:42
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Re: how to exit my Pillar 3A insurance policy smoothly?

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As macabre as it is, it is the option which gives the highest return.

@neutralname Why did you choose a life insurance pillar 3a product over a bank account or funds product in the first place? Do you have family and kids which could profit from it?
Thanks aSwissInTheUS, I haven't really "chosen" it, I wasn't even aware of the difference.
I am single, without kid, only have one parent living outside Europe
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Old 11.11.2019, 11:12
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Re: how to exit my Pillar 3A insurance policy smoothly?

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I am single, without kid, only have one parent living outside Europe
Is this single parent financially dependent on you?
If not, your second best option to make the most of your investment is to find a nice partner and have a few kids. At least in that case a life insurance would make some sense in the end.

Selling a life insurance to an independent, unbound, 30-something years old without any kids or other financial dependents is very close to a scam and should be declared as fraud.
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Old 11.11.2019, 12:38
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Re: how to exit my Pillar 3A insurance policy smoothly?

Check for this thread for some discussions and guidelines

https://forum.mustachianpost.com/t/p...ing-everything
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Old 11.11.2019, 14:26
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Re: how to exit my Pillar 3A insurance policy smoothly?

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Selling a life insurance to an independent, unbound, 30-something years old without any kids or other financial dependents is very close to a scam and should be declared as fraud.
Except they did not sell the OP a live insurance policy, if you are going to make statements like that, then take the time to get your facts straight.

It is a perfectly valid option for a single person, especially a young person. Now go research the products and figure it out for yourself.
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Old 11.11.2019, 14:26
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Re: how to exit my Pillar 3A insurance policy smoothly?

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Is this single parent financially dependent on you?
If not, your second best option to make the most of your investment is to find a nice partner and have a few kids. At least in that case a life insurance would make some sense in the end.

Selling a life insurance to an independent, unbound, 30-something years old without any kids or other financial dependents is very close to a scam and should be declared as fraud.
Thanks, no my parent is financially independent.
So how do I proceed to declare this as fraud and have a full refund?
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Old 11.11.2019, 14:30
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Re: how to exit my Pillar 3A insurance policy smoothly?

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how do I proceed to declare this as fraud and have a full refund?
You don't, as it's not.

"should be" <> "is"

Tom
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Old 11.11.2019, 14:30
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Re: how to exit my Pillar 3A insurance policy smoothly?

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Check for this thread for some discussions and guidelines

https://forum.mustachianpost.com/t/p...ing-everything
Thanks, damn, looks like it is the same person who made the post as the same title thread made ny "Las" in EF
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Old 11.11.2019, 14:53
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Re: how to exit my Pillar 3A insurance policy smoothly?

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Except they did not sell the OP a live insurance policy, if you are going to make statements like that, then take the time to get your facts straight..


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I have bought 3A at Axa Winterthur since 2016 and paid 3 annual premiums of 6.8k CHF.
Life insurance Protect Plan
also: https://www.axa.ch/doc/aa22o

Talks like a duck, walks like a duck ...

PS: what is a live insurance?
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Old 11.11.2019, 15:58
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Re: how to exit my Pillar 3A insurance policy smoothly?

It's a 25 year policy at least the first 2 years premiums will be lost.
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Old 11.11.2019, 16:00
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Re: how to exit my Pillar 3A insurance policy smoothly?

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Except they did not sell the OP a live insurance policy,
Oh yes they did, the clue is in the name of the product 'Life insurance Protect Plan'
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Old 11.11.2019, 16:31
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Re: how to exit my Pillar 3A insurance policy smoothly?

From what I understand, this is a strictly cash-value policy without attached term life insurance. Please correct me if I'm wrong.

With cash value life insurance, the first premiums you pay go towards covering the policy's administrative costs and insurance premiums (if life insurance, premium insurance or other insurance coverages are included). Once those have been covered, additional premiums are applied towards the policy's cash value.

In your case, the difference between what you paid so far and the policy's cash value represents the cost of the policy.

If you would keep the policy until it matures, the dividends or returns on investments will almost certainly make up for the cost. The guaranteed cash value will typically be somewhat lower than the sum total of your premiums.

The money you could earn through retirement funds would likely be higher. But the insurance benefit is at least partly guaranteed, and at the end of the insurance term you can expect to receive as much or more than you paid in premiums.

If you are forced to terminate your policy (because you are leaving Switzerland or otherwise not eligible to keep contributing to the pillar 3a), then you have to make a choice.

Insurance companies may let you "convert" your policy to a pillar 3b policy. In this case, your pillar 3a assets will be segregated, but you can continue funding your policy and building cash back until it matures. If you do this, you won't lose the money you paid for the policy, but you will have to continue paying premiums until it matures.

The other option is to simply surrender the policy and write off what you paid for it as a loss.

Converting to a 3b policy would seem to be the sensible option if possible, considering you have already paid the bulk of costs and you are now able to build cash value. However, you should account for opportunity costs and see whether these may outweigh the cost of surrendering.

Note: On your insurance quote or in your policy's insurance agreement, there should be a breakdown of the guaranteed cash value by year. If you are interested, you can find some examples in my blog post on cash value insurance:
http://swiss-blog.com/money/insuranc...n-switzerland/
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Old 13.11.2019, 20:27
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Re: how to exit my Pillar 3A insurance policy smoothly?

Thanks, the problem is not only about the first few years, if you check the attached table. even for the last years, the increment on the surrender value is lower than the yearly premium...

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It's a 25 year policy at least the first 2 years premiums will be lost.

Thanks Daniel, the insurance part in the policy is if I become disabled which stop me from working, AXA will pay the premiums for the 3A till the end. I think this is a low probability and the cost to have this insurance is too high.

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From what I understand, this is a strictly cash-value policy without attached term life insurance. Please correct me if I'm wrong.

With cash value life insurance, the first premiums you pay go towards covering the policy's administrative costs and insurance premiums (if life insurance, premium insurance or other insurance coverages are included). Once those have been covered, additional premiums are applied towards the policy's cash value.

In your case, the difference between what you paid so far and the policy's cash value represents the cost of the policy.

If you would keep the policy until it matures, the dividends or returns on investments will almost certainly make up for the cost. The guaranteed cash value will typically be somewhat lower than the sum total of your premiums.

The money you could earn through retirement funds would likely be higher. But the insurance benefit is at least partly guaranteed, and at the end of the insurance term you can expect to receive as much or more than you paid in premiums.

If you are forced to terminate your policy (because you are leaving Switzerland or otherwise not eligible to keep contributing to the pillar 3a), then you have to make a choice.

Insurance companies may let you "convert" your policy to a pillar 3b policy. In this case, your pillar 3a assets will be segregated, but you can continue funding your policy and building cash back until it matures. If you do this, you won't lose the money you paid for the policy, but you will have to continue paying premiums until it matures.

The other option is to simply surrender the policy and write off what you paid for it as a loss.

Converting to a 3b policy would seem to be the sensible option if possible, considering you have already paid the bulk of costs and you are now able to build cash value. However, you should account for opportunity costs and see whether these may outweigh the cost of surrendering.

Note: On your insurance quote or in your policy's insurance agreement, there should be a breakdown of the guaranteed cash value by year. If you are interested, you can find some examples in my blog post on cash value insurance:
http://swiss-blog.com/money/insuranc...n-switzerland/
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Old 13.11.2019, 20:36
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Re: how to exit my Pillar 3A insurance policy smoothly?

Leave Switzerland.
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