If you've been living in Switzerland for some time, you must already have some experience with the Swiss social security and pension system. You know you have several options and it's a good practice to review your insurance setup, optimize your costs, and save money.
Read the entire article to find out answers to burning questions such as: What does Swiss health insurance cover? How does Swiss social security work? As an expat in Switzerland, how do I make sure my family back home is protected in case something happens to me?
Or you could also have a look at the video below where Marcus Vinti, Head of Expat Services at Helvetia explains clearly what expats need to consider to optimise their insurances and save money in the long run:
In this guide, we work with Helvetia to highlight your options as an insured person in Switzerland. Helvetia is a leading Swiss insurer that specializes in international professionals and offers a free insurance check to help you better assess your options.
If you've been living in Switzerland for a few years, it's high time you checked your insurance coverage. Thanks to this free insurance check, you can optimize your costs, discover gaps in your insurance coverage and retirement planning, eliminate unnecessary insurance and ultimately save your hard-earned money.
Until you decide to book an insurance check-in for yourself, check out this article where we've collected some frequently asked questions from our community about retirement and savings in Switzerland's healthcare system.
If I have lived with my family in Switzerland for many years, which benefits can I expect after retirement?
The pension system in Switzerland is based on three main pillars and you can enjoy its benefits just like any Swiss resident does.
The first pillar is the basic state pension also known as OASI (Old Age and Survivor's Insurance), also known as AHV (Alters-und Hinterlassenenversicherung) in German or the AVS (Assurance vieillesse et survivants) in French. Within this pillar, employers, and employees both contribute to the Swiss social security funds, also for family members who don't work. 1st pillar includes old age savings insurances for survivors and disability.
The second pillar or BVG (Berufliche Vorsorge/Prévoyance Professionelle) deals with occupational pensions, which are mandatory for those who earn more than CHF 21,510 per year. The topics covered are the same as in the first pillar
The third pillar is optional and focuses on private retirement planning (also known as pillars 3a and 3b). With this pillar you can close gaps from the 1st and 2nd pillar: Old Age, Survivor and Disability Pension. Most expats have some gaps because they haven't contributed to Pillar 1 since they were young.
Self-employed professionals depending on the legal entity and income have to join a pension fund.
How can my partner be protected if we are unmarried and/or they have little or no income, if something happens to me as a main earner?
For individuals who are not employed, contributions are based on assets and income received through social benefits. They're also covered in the event of death: As surviving spouses, same-sex registered partners, or children of the deceased, they're entitled to a survivor's or orphan's pension in Switzerland.
These pensions can only be granted if, among other conditions, the main earner has paid AHV contributions for at least one year. However, the pension will be very low.
Through free gap analysis, the Helvetia insurance expert can provide an overview of the situation in the event of disability, death and old age pension for individuals and couples (married or not) as there is a difference.
Life or disability insurance can cover both scenarios. Especially important when children are involved. The insurance can be cancelled annually if it's no longer needed.
How can I use my insurance/savings to buy a property?
As a foreigner, you can buy land, holiday homes or real estate for commercial purposes in Switzerland. You can also use your 2nd pillar pension and, if you have 3rd pillar savings, as collateral for your mortgage, just like Swiss citizens. This is only possible for owner-occupied properties.
The home ownership promotion (WEF) distinguishes between the advance withdrawal of pension fund assets and the pledging of pension fund assets. In the case of an advance withdrawal of pension fund assets, the pension capital is used for higher equity and a lower mortgage. The disadvantage is that any pension gaps that arise must be closed again independently before retirement, otherwise there is a risk of lower benefits in old age.
If you want to pledge your pension fund assets, the pension capital goes to the bank to create more debt capital through a higher mortgage amount. The downside is that mortgage interest rates are higher.
It is also important to purchase life insurance in case something happens to the primary earner in the event of death or disability, so that the partner/husband/wife can continue to live in the property and not have to sell.
The good news is that you can learn how to secure your future in Switzerland and maintain your standard of living with a simple and free insurance check-in from Helvetia, which also provides mortgage advice.
How can I manage my savings?
If you want to protect yourself financially in retirement, you can take advantage of two voluntary pension options with tax benefits: buying into a pension fund or paying into pillar 3a. A voluntary purchase into the pension fund is financially very attractive. Investing elsewhere would require a return of around 10% to generate the same capital after 10 years. When saving in the 3rd pillar, you've more flexibility, you can choose the investment horizon as well as the investment funds, which you can change during the contract period.
How can I make up for missing contributions to my pension fund?
You can start saving with a 3rd pillar investment fund, which you can deduct from tax. You can also buy in the company investment funds, there is less flexibility as in the 3rd pillar. You can also do both.
As an expat in Switzerland, how do I make sure my family back home is protected in case something happens to me?
There are a few things you can do to make sure your family is taken care of in case something happens to you while living in Switzerland as an expat. The first step is to ensure that you have adequate insurance coverage. This will provide some peace of mind, knowing that your loved ones will be taken care of financially if something happens to you.
A death or disability pension can be taken out as a lump sum and cancelled when it's no longer needed. This is a quick and easy way to ensure that your family will have the financial resources they need.
How can I check my current pension funds and who can help me to understand the covers on the pension statement?
When it comes to pensions, it's important that you know what you're signing up for. Unfortunately, a lot of people are not fully aware of the risks and covers associated with their pension funds. This is where speaking to a Helvetia expert can be really helpful; they can help you understand your statement and what different covers mean for you.
Companies provide online statements and overviews of the pension capital managed by their own pension fund company or another pension institution. Helvetia's experts can give you an overview of coverage related to savings, death and disability. If you aren't married, it's important to know whether the husband or wife and children are insured and to what extent.
How can I get rid of unnecessary coverage in my insurance?
In a consultation, the Helvetia insurance expert compares the insurance coverage with your needs and determines which insurance policies are unnecessary or need to be taken out with another insurer.
The Helvetia insurance expert will be happy to advise you on all questions relating to your insurance policies and answer any questions you may have.
What does Swiss health insurance cover?
Basic health insurance in Switzerland is mandatory for all residents. The coverage you receive through basic health insurance depends on the canton in which you reside, but most plans cover medical care and preventive measures during maternity. Dental treatment is generally not covered in mandatory basic insurance plans, though some companies may offer supplemental dental insurance. All insurance companies are obliged to offer the same benefits in their mandatory basic insurance plans, including accident coverage. However, if you work less than 8 hours a week for the same employer, you are not required to have accident coverage as part of your health plan.
Swiss health insurance is a government-regulated system that covers basic benefits for inpatient and outpatient care, emergency care, and prescribed medicines. Insured persons who work 8 hours/week for one employer are covered for emergencies. Additionally, more than 80% of the Swiss population has an additional health insurance to cover benefits that are not included in the basic package. Policies and companies offer different benefits, so it is important to research what each one offers before making a decision.
There are many things to consider when choosing a Swiss health insurance plan. For one, insurance companies can reject applicants who have a pre-existing medical condition. Secondly, Switzerland has mandatory basic insurance, but supplemental health insurance is optional. This means that while the mandatory basic insurance covers the same benefits, premiums and add-ons vary between policies. Lastly, we highly recommend to compare different health insurance plans before committing in order to find the best deal for your needs.
How does Swiss social security work?
In Switzerland, social security is a system of insurance that covers you and your family in case of illness, maternity, occupational accidents or unemployment. It is compulsory for all residents in Switzerland and there are several different schemes which cater to different needs.
There are several types of social security in Switzerland: medical insurance (LAMal), accident insurance (SUVA), unemployment insurance (AVS) and old-age pension insurance (AHV). All residents of Switzerland must be insured under one or more of these schemes. The type of scheme you are covered by depends on your occupation and residence status.
Swiss social security is based on the principle of solidarity. This means that everyone pays into the system according to their ability to pay, and everyone can benefit from it when they need it. Social security contributions are automatically deducted from your salary each month, so you don't have to worry about paying them yourself.
Conclusion
The Swiss insurance system can be confusing, but with the help of a specialist, you can find the best coverage for you and save money on your premiums. Helvetia has experts who can help you find the right insurance plan and save you money. Call today to discuss your needs – they'll be more than happy to help!
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