"In Switzerland, 70% of what the state investments is long-term life insurance (ten years or more). This is a lot of money that is properly invested. This is the future", says Igor Yurgens, the president of the All-Russian Union of Insurers, president of the Russian Union of Motor Insurers.
With an annual premium per capita of about 7100 CHF (only direct insurance without social security contributions is taken into account), the level of insurance coverage in Switzerland is the highest in the world.
Switzerland's insurance sector is largely unique. Not being the oldest in the world, it has a long tradition and can be rightfully called the most reliable one. No insurance company ever went bankrupt or refused to fulfill its obligations; and strict supervision of the insurance business supports Switzerland's reputation as one of the largest insurance centers.
The insurance industry is an important part of the Swiss economy. A well-developed legal and regulatory framework protects the interests of clients and beneficiaries. The policy holders of Swiss insurance companies are provided with reliable protection; their rights are guarded vigilantly than in any other country. The advantages of the sector include certain tax concessions, but above them a great experience and professional knowledge that have been accumulated over the years.
Life insurance in Switzerland can be both individual and group. Life insurance policies offered by local insurance companies provide protection for old age, in case of death and disability, being an integral part of the social security system fixed in the Swiss constitution. The system’s basis is pensions, survivors' payments and disability benefits provided for under both mandatory and voluntary pension plans.
Everyone who lives or works in Switzerland is subject to compulsory pension, disability, and surviving dependents’ insurance, as well as temporary incapacity for work, which constitute the first element of the Swiss social protection system. And all those employed in Switzerland, are included in the social insurance program. The Federal Law on Professional Pension Insurance, Survivors and Disability Insurance sets the minimum maintenance amount. Together with the Law on Accident Insurance, it forms the second element of the social protection system.
Individuals can obtain additional insurance coverage by selecting a related life insurance policy (under the bank savings program) or other types of insurance protection (third element) and savings programs (life insurance, bank savings, etc.).
The term "related" means that, while providing tax concessions, such a product is subject to certain restrictions. In other words, this type of insurance only provides for pension payments.
With the professional pension provision, each employer is obliged to organize a private insurance and pensions system, the minimum amount of insurance provided for by the Federal Law. Individual entrepreneurs can also conclude an insurance contract in the framework of a professional insurance plan.
Individual life insurance allows you to protect yourself against economic risks in accordance with personal needs, whether it concerns individual or voluntary programs, insurance cover is determined by the nature of personal needs and takes into account the wishes of the client.
Companies and organizations engaged in life insurance, offer private individuals protection in three categories of risk:
1) Death from disease or an accident (benefits in the form of payment of capital or pension to people who lost their family providers);
2) Loss of capacity to work due to illness or accident (payments in the form of daily allowances or pension payments, sometimes in the form of payment of capital);
3) Old age of the policyholder (lump sum payments in case of inheritance, or temporary or lifetime pension payments).
Endowment insurance
(Survival insurance combined with straight life insurance)
Endowment insurance is the most common form of life accumulative insurance, which offers combined old-age and survivors' insurance coverage (that is, insurance that maintains savings and payment of benefits in case of death of the insured). The endowment policy is concluded for survival until a certain age or at the notional value, which is 80 000 CHF and is paid along with accumulated bonuses or dividends at the age of 65 years. If the insured person has died before reaching this age, his capital, including the bonuses due, is immediately paid to the beneficiaries specified in the will.
Taxes
For foreigners who invest in Swiss insurance, taxes are generally minimal or nonexistent; investment allocation, their growth or export from Switzerland is tax-free.
The income and dividends on insurance policies are exempt from tax deductions. Since in other cases such a tax is high enough (up to 35%), this makes investments in Swiss insurance much more attractive than investing in Swiss bank deposits or government bonds.
Swiss insurance companies do not have to provide information about policyholders to tax authorities. Moreover, the law strictly regulates the disclosure of any information relating to customers of Swiss insurance companies and banks. Information is provided only in certain circumstances, mainly in cases of criminal offenses, money laundering, terrorist financing, etc. If information is requested by a foreign government or tax authorities, even more stringent rules apply: foreign authorities should act under Swiss law that protects the rights of the parties involved.
The obligation to report on the capital invested in Swiss financial institutions, including insurance companies, is imposed solely on the investor.
Straight Life Insurance
(Allowance payment in case of death of the insured)
In case of straight life insurance the insurance benefits are paid in a lump sum as well as an income in the form of regular payments (paid to the beneficiary if the insured has died before the policy term). There are several options for insurance solutions; it all depends on the needs and wishes of the insured (for example, term life insurance with growing or falling cost). Insurance premiums can be fixed or variable; they can be periodically reconsidered (they are usually recalculated annually, given the growing risk of death with increasing age of the insured).
Pension annuities
Instead of a lump sum payment of insurance settlement, it is possible to consider regular pension payments, which will provide the insured with a lifetime income till the end of his life. Usually, pension annuities are supplemented with insurance coverage for surviving dependents. A contract for two people can be also concluded; the payments on this policy are received by two policyholders (for example, a widow after her husband's death will continue to receive the pension in full), or stipulate that all premiums paid, except for those paid in the form of income, are reimbursed to the beneficiaries, surviving dependents, with no interest (annuity with a money-back guarantee).
It is never too late taking care of an annuity. The amount of pension income, as a rule, is higher if the policyholder starts receiving payments as late as possible. Besides, only 40% of self-financed retirement income is taxed.
Disability income insurance
If in the case of temporary incapacity for work due to illness or an accident, the cash benefit is paid for a limited period (it is a disability that prevents from earning a living and thus leads to a loss of labor income). Income insurance in case of permanent incapacity for work, as a rule provides compensation payments up to 65 or 63/64 years of age (that is, before receiving payments under the federal pension scheme, pension, disability, and surviving dependents’ insurance.
Other types of insurance
Apart from the main programs, insurance companies offer a variety of other life insurance products, including:
• Insurance policies providing several payments on specified periods (accumulative insurance programs with payments upon reaching a certain age);
• Insurance of minors (insurance to a certain age for educational funding);
• Insurance policies with investment component or linked to indices (life insurance policies, the income of which depends on the value of the unit in the relevant fund or the index rate);
• Convertible insurance policies that allow the policy holder to change the policy currency during the insurance period.
Target audience group 50+
Today, older people are healthier, richer and much more active than previous generations. This makes them a very attractive target group for insurance companies. Although the market for insurance products for seniors is as heterogeneous as the 50+ generation itself, more insurance companies are developing products for this category of customers.
Insurance schemes for 50+ customers are oriented not so much for the future, as for maintaining or even improving the living standard in the present. After retirement, people are particularly lacking attention, especially as the need for protection against risks increases with age. Older people tend to maintain personal contacts with their insurance agents and study information on new insurance products with a great interest. Unfortunately, in a bid to use client portals and internet for work in certain insurance segments, the needs of a significant part of the population aged over 50 are overlooked. The active use of new technologies is focused more on the needs of younger clients.
One of the surveys shows that only 36% of insurance companies offer products meeting the needs of clients over 50. And only one in three insurance companies can provide financial consultation that recognizes the needs of older clients. Thus, 78% of insurance companies do not have tools to support older citizens in matters of inheritance and wills, and only 21% offer consultations on safety and accident prevention.
In Germany, the insurance group Ideal is leading on the insurance market for seniors. A recognized standard product has become, in particular, a long-term medical care for the elderly; but there are no similar products on the Swiss market yet. Not limiting itself with the insurance business, Ideal expanded its range of services in the German market: by bringing the largest funeral service company into the fold, and planning to build senior centers.
The demographic aging of the Swiss population makes insurance products for the elderly extremely promising. According to the Federal Statistical Office, by 2050 the population over 65 will reach 2.2 million. The share of people over 80 years of age will grow from 4 to 12% of the total population.
Insuring of older people has several pros:
• Older people are much more concerned about risks;
• They are more disciplined when making payments;
• They react less sharply to the price;
• Pensioners are available to meet and consult during the day;
• There are many affluent people among the seniors, so the risk of contract termination is very low.
Sources: http://www.rulit.me/books/zashchita-aktivov-i-strahovanie-chto-predlagaet-shvejcariya-read-433262, http://www.banki.ru/news/interview/?id=10341192,
Photos per websites: blogohealth.ru, charter97.org, euromag.ru
