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Disability pension
Pillar 3a
Illness & accident

What types of insurance do immigrants need?

Many Germans dream of upping sticks and heading to Switzerland. However, life is full of risks, even in spectacular Alp country. The following tips highlight what types of insurance you need to consider if you want to be secure in your new home.

2 October 2015, text: Hansjörg Ryser, photo: istock

A couple, holding hands and carrying their luggage, has just arrived at the airport.

If you are like Eva Bajer and move to Switzerland as an expat, you’ll soon find that life is full of risks here, too. Luckily, there is an equally large number of insurance types. Some are required by law, as in Germany, including basic health insurance. Pensions are compulsory, too. But that’s not something that employees have to worry about much. Employers pay contributions to the 1st pillar, which comprises old-age and survivors’ insurance (OASI) and disability insurance.

Not everyone has accident insurance

Workers are automatically insured through their employer against unemployment and accidents sustained on or off the job. However, they qualify for accident insurance only if they work more than eight hours a week. If they meet this standard, they don’t need to buy accident coverage from their health insurer. Supplementary accident coverage is, however, advisable for spouses and children who are not gainfully employed. Helvetia offers suitable insurance in partnership with Helsana.

Contribution gaps due to immigration

The 2nd pillar of the Swiss pension system is also compulsory. It, too, is largely handled by employers or their pension funds. Expats need to realise that if they leave Switzerland prematurely, they can take only the extra-mandatory portion of their pension with them. The compulsory portion will not be paid out as an annuity or lump-sum payment until retirement. Until then, the money will be parked in an account or a policy with a vested benefits institution. Also, immigrants are particularly likely to have significant gaps in their pension contribution history.

Pillar 3a for withholding tax as well

The 3rd pillar consists of individual retirement savings. Contribution gaps can be closed through purchases (i.e. extra voluntary contributions), which can be deducted from taxable income. The same is true for contributions to pillar 3a plans.You can deduct these contributions even if your income is subject to withholding tax. Contributions are usually capped. This year, for example, employees can contribute no more than CHF 6,739 to pension funds. The assets are tied up until they retire or leave gainful employment in Switzerland. Early withdrawals can be made to help pay for residential property.

Coverage gaps due to illness

Helvetia offers a host of custom solutions, including flexible pension plans, for pillar 3a as well as pillar 3b. Risk insurance in the event of occupational disability is especially advisable for young immigrants. They are particularly susceptible to having gaps in insurance coverage in the event of an illness. Premiums paid to a pillar 3a plan can also be deducted from taxable income as long as the maximum amount is not exceeded.

Security deposit insurance

Private liability and household contents insurance are among the most important forms of property insurance. While private liability insurance can satisfy claims for damages sustained by third parties, household contents insurance covers damages to your own property due to theft, fire, water damage and other perils. These insurance types may not be compulsory, but they are just as useful as accidental damage insurance for damage to your motor vehicle. The same applies to legal expenses insurance or security deposit insurance for flats.

Buildings insurance required

Liability insurance is compulsory for motor vehicles, however. So is buildings insurance, at least in most cantons. Helvetia can offer this coverage only in some cantons; in others, it is subject to monopoly restrictions.

No need to pay back Riester or Rürup

Finally, it’s worth noting that you won’t lose any savings in your German Riester and Rürup pension plans. You will keep your pension entitlements. Any subsidies you have received won’t have to be paid back.

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