Insurance in Switzerland: all you need to know

These are the mandatory types of insurance in Switzerland:

• Basic health insurance

• Accident insurance

• Motor vehicle insurance for vehicle owners

• Buildings liability insurance for homeowners

‼️ Within 3 months of your arrival in Switzerland, you will be asked to provide proof that you have health insurance coverage.

What's inside

1. Types of Insurance in Switzerland

• Mandatory Insurance

  • Basic health insurance

  • Accident insurance

  • Motor vehicle insurance for vehicle owners

  • Buildings liability insurance for homeowners

• Optional forms of insurance in Switzerland: Essential insurances

  • Third-party liability insurance

  • Households contents policy

• Optional forms of insurance in Switzerland: Recommended insurances

  • Legal expenses insurance 

  • Life insurance

  • Motor vehicle insurance (comprehensive)

  • Rental security deposit insurance

2. Optimizing Your Coverage & Savings

• Pension & Retirement Planning

• Family Protection

• Property & Mortgages

• Insurance Review & Optimization

• Health Insurance & Social Security

3. Take Action: Get Your Free Insurance Review

Important deadline 

Within 3 months of your arrival in Switzerland, you must provide proof that you have health insurance coverage. This applies to everyone, including those staying for less than three months unless they have equivalent foreign coverage.

There are further forms of insurance coverage, which can be broadly divided into essential and recommended. While the following insurance types aren't legally required, almost every adult in Switzerland has them. Think of these as essential rather than optional, particularly if you're renting property.

👉 Key for renters: Landlords often require proof of third-party liability insurance before signing a tenancy agreement, especially in French-speaking regions. You'll need this certificate at least one week before your accommodation handover.

Watch before Reading: Insurance Optimization for Expats by Helvetia

Marcus Vinti, Head of Expat Services at Helvetia, explains what expats need to consider to optimize their insurance and save money in the long run. Watch the video here to get expert insights before diving into the details below.

🗣️ If I've lived with my family in Switzerland for many years, which benefits can I expect after retirement?

The Swiss pension system is built on three pillars, and as a resident, you can enjoy its benefits just like any Swiss citizen. Understanding how these pillars work together is essential for planning your retirement.

• First Pillar (OASI/AHV/AVS)

  • Basic state pension where both employers and employees contribute to Swiss social security funds. This covers family members who don't work and includes old age savings, survivor benefits, and disability insurance.

• Second Pillar (BVG)

  • Occupational pensions mandatory for anyone earning more than CHF 21,510 per year. The German acronym BVG stands for Berufliche Vorsorge, which you'll see on all your pension documents. This pillar covers the same areas as the first pillar. Self-employed professionals may need to join a pension fund depending on their legal entity and income level.

• Third Pillar (3a and 3b)

  • Optional private retirement planning that allows you to close gaps from the first and second pillars. This is particularly important for expats who haven't contributed to the first pillar since their youth, which often means there are gaps to fill.

🗣️ How can I make up for missing contributions to my pension fund?

You have several practical options for addressing pension gaps:

• Save with a third pillar investment fund

  • Tax-deductible with flexibility to choose your investment horizon and funds, which you can change during the contract period based on market conditions or your changing risk tolerance.

• Buy into company investment funds

  • Less flexibility but financially very attractive. Here's a number that matters: investing elsewhere would require returns of around 10% to generate the same capital after 10 years, which puts the value proposition into perspective.

• Combine both approaches above to maximize your retirement savings and tax benefits.

🗣️ How can I manage my savings tax-efficiently?

If you want to protect yourself financially in retirement while taking advantage of tax benefits, you have two main voluntary pension options:

• Buying into your pension fund is financially very attractive. You'd need approximately 10% returns elsewhere to generate equivalent capital over a decade.

• Paying into pillar 3a offers more flexibility. You can choose your investment horizon and select from various investment funds, with the ability to adjust these choices during the contract period based on changing circumstances.

🗣️ How can my partner be protected if we're unmarried and they have little or no income, if something happens to me as the main earner?

This is a common concern for couples who aren't married or where one partner doesn't work.

For individuals who aren't employed, contributions to the social security system are based on their assets and any income received through social benefits. In the event of death, surviving spouses, same-sex registered partners, and children of the deceased are entitled to survivor's or orphan's pensions in Switzerland.

• Here's the catch: these pensions can only be granted if the main earner has paid AHV contributions for at least one year, and even then, the pension amount will be quite low—often insufficient to maintain a comfortable standard of living.

• A better solution: Life or disability insurance can cover both scenarios, especially important when children are involved. These policies can be structured as lump-sum payments and cancelled annually if they're no longer needed, giving you flexibility as your circumstances change.

Through free gap analysis, Helvetia insurance experts can provide a comprehensive overview of what would happen in the event of disability, death, or upon reaching retirement age. This analysis works for both individuals and couples, whether married or not. The differences between these situations can be significant and aren't always obvious.

🗣️ As an expat in Switzerland, how do I make sure my family back home is protected if something happens to me?

Protecting family members who live in your home country while you're working in Switzerland requires some planning.

The first step is ensuring you have adequate insurance coverage, which provides peace of mind knowing your loved ones will be financially supported if something happens to you.

A death or disability pension can be structured as a lump-sum payment, providing immediate financial resources when they're needed most. The policy can be cancelled when circumstances change and it's no longer needed, making this a flexible solution.

🗣️ How can I use my insurance and savings to buy property?

As a foreigner in Switzerland, you can purchase land, holiday homes, or real estate for commercial purposes. More importantly, you can use your second pillar pension and third pillar savings as collateral for your mortgage, just like Swiss citizens. However, this is only possible for owner-occupied properties, not for investment properties or vacation homes.

The home ownership promotion system (known as WEF, short for Wohneigentumsförderung) gives you two distinct options:

• Advance withdrawal of pension assets: you use your pension capital to increase your equity contribution, resulting in a lower mortgage amount.

  • Advantage: Lower debt and lower interest payments

  • Disadvantage: You must close any pension gaps independently before retirement, or risk receiving lower benefits in old age

• Pledging pension assets: your pension capital goes to the bank to create more debt capital through a higher mortgage amount.

  • Advantage: You maintain your pension savings while accessing property financing

  • Disadvantage: Higher mortgage interest rates since you're borrowing more

❗️ Critical protection: Regardless of which option you choose, purchase life insurance in case something happens to the primary earner through death or disability. This ensures that your partner can continue living in the property without being forced to sell during what's already a difficult time.

As an added benefit, Helvetia's free insurance check-in also includes mortgage advice, so you can address both insurance and property financing in one conversation.

🗣️ How can I check my current pension funds and who can help me understand my pension statement?

Understanding your pension statement is one of those tasks that many people put off because the documents can be confusing and full of technical terminology.

Most companies provide online statements and overviews of the pension capital managed by their pension fund or another institution, but making sense of these documents is another matter entirely.

This is where speaking with a Helvetia expert becomes valuable. They can give you a clear overview of your coverage related to:

• Savings accumulated over time

• Death benefits for your survivors

• Disability coverage

If you're not married, it's particularly important to understand whether your partner and any children are insured and to what extent, since the rules differ significantly from those for married couples.

🗣️ How can I get rid of unnecessary coverage in my insurance?

During a consultation with a Helvetia insurance expert, they'll compare your current insurance coverage with your actual needs to identify policies that might be unnecessary or insufficient. The goal is to determine which insurance policies you don't really need and which coverage might need to be adjusted or taken out with a different insurer for better terms or pricing.

What do you gain from this process?

• Eliminate wasted premium payments

• Optimize costs across your insurance portfolio

• Ensure you have the right protection for your current life situation

• Remove coverage that made sense five years ago but no longer fits your needs

🗣️ How does Swiss social security work in practice?

Swiss social security is a compulsory insurance system that covers all residents and their families. The system is based on the principle of solidarity, meaning everyone pays into it according to their ability, and everyone can benefit from it when they need support.

The system addresses several major areas:

• Medical insurance (LAMal) provides basic health coverage

• Accident insurance (SUVA) covers workplace and general accidents

• Unemployment insurance (AVS) protects your income during unemployment

• Old-age pension insurance (AHV) provides retirement benefits

What makes this system relatively painless for employees is that social security contributions are automatically deducted from your salary each month. You don't have to worry about making payments yourself or tracking contribution deadlines, as the system operates in the background, building up your entitlements over time.