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Pillar 3a

What types of insurance do newcomers need?

Packing up and moving to Switzerland – that’s what many people dream of. To ensure that newcomers are properly insured, here are some tips on which types of insurance they should consider in order to live securely in their new country.

19 April 2019, text: Hansjörg Ryser, photo: istock

A couple, holding hands and carrying their luggage, has just arrived at the airport.
What kinds of insurance do expats need in Switzerland?

If you 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 even required by law. Which makes it all the more important to be familiar with the main types of insurance and the related rules.

Mandatory insurance

Health insurance is mandatory in Switzerland and must be taken out within 3 months of arriving in the country. For owners of motor vehicles, third-party liability insurance is mandatory. And for homeowners, so is buildings insurance, at least in most cantons. 

The main types of property 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, etc. These insurance types may not be mandatory, but they are highly recommended. As is accidental damage insurance for damage to your motor vehicle, legal expenses insurance or security deposit insurance for flats.

Accident protection 

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 insurance is, however, advisable for spouses and children who are not gainfully employed. 

Contribution gaps due to immigration

Old-age and survivors’ insurance (OASI) is one pillar of social welfare in Switzerland and, together with disability insurance, makes up the state pension (1st pillar). OASI is intended to at least partially replace the decline in or loss of earnings due to old age and death. Like OASI, disability insurance (IV) (1st pillar) is a mandatory insurance. It serves to secure the livelihood of insured persons should they become disabled, with integration measures or monetary payments. Like the state pension (OASI/IV), occupational pensions are also mandatory. Occupational benefits are, however, handled largely by the employer. Expats need to be aware that, if they return early to their country of origin, they can only take 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. It's also worth knowing that expats are particularly likely to have significant contribution gaps, particularly in their state pension (1st pillar) and occupational pension (2nd pillar).

Private retirement savings for withholding tax as well

These consist of individual retirement savings. Contribution gaps can be closed through purchases, which can be deducted from taxable income. The same is true for contributions to private retirement plans, pillar 3a. This is private, tied insurance. You can deduct these contributions even if your income is subject to withholding tax. Contributions are usually capped. In 2019, employees can contribute no more than CHF 6,826 to pension funds. The assets are tied up until they retire or leave gainful employment in Switzerland. Early withdrawals can, however, be made to help pay for residential property or if they leave Switzerland.

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 newcomers. They are particularly susceptible to having gaps in insurance coverage in the event of an illness. In pillar 3a, premiums can even be deducted from taxable income.

Specialized advisors

As insurance in Switzerland is still a closed book for many newcomers, we have a team of around 20 customer advisors from all over Switzerland who specialize in the special needs of newcomers and expats. Our advisors have broad expertise and, of course, are multilingual.

Helvetia Safety Instructions

Our life situation is constantly changing. Newcomers and expats in particular run the gamut of circumstances, whether they are newly arrived or have lived here for a while. Their insurance needs will vary accordingly. The Safety Instructions are a tool to help newcomers find their feet in Switzerland during this time and make them aware of the needs and risks. Would our Safety Instructions be helpful to you? If so, register here and we will be happy to send you a free copy.

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