Life insurance Switzerland: everything you need to know (2026)

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Life insurance is regarded as old-fashioned. Yet it is often underestimated – in fact, it is one of the best ways to provide for your financial future.

What is life insurance?

The term “life insurance” refers to insurance policies that cover risks such as death and disability – otherwise known as risk-only life insurance policies – and insurance policies that are primarily used for private retirement provision – capital-accumulating life insurance policies. Both are part of the third pillar of Switzerland’s three-pillar system and thus of your private retirement provision.

What is the purpose of life insurance? And who is it intended for?

With a life insurance policy, you can meet several needs at once. Insurance against disability is always a good idea, even for young adults. For families, it also makes sense to have cover for the event of death. And saving for retirement or to buy a home is worthwhile for everyone. Many people have gaps in their AHV and pension fund coverage. With a life insurance policy, you can close these gaps and thus ensure that you have the best possible provisions for the future.

Which type of life insurance is right for me?

There is no general answer to the question of which life insurance policy is the right one for you. Depending on whether you live alone or have a family, different life situations require different solutions. Our pension tips provide an initial, easy-to-understand overview of your pension situation.

Talk to your advisor about what your financial situation would be in the event of disability, how your family is protected if you die, and whether there is a gap in your retirement provision. That way, you will know quickly and reliably which kind of insurance you need.

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How much does life insurance cost per month?

Every life is different. The same goes for life insurance and retirement provision. For that reason, the costs of life insurance also differ greatly. The premium for your personal life insurance and retirement provision solution is determined entirely by your situation. Depending on the product and your individual circumstances, a capital-accumulating insurance policy may cost as little as CHF 100 per month.

In pillar 3a, employees can pay a maximum of CHF 7,258 into a life insurance policy*. The maximum monthly premium is therefore around CHF 604.

For self-employed people without a pension fund, the maximum limit is CHF 36,288 per yar or around CHF 3,024 per month*.

There is no limit on premiums in pillar 3b.

* As of 2026

Does life insurance have tax benefits?

In pillar 3a, life insurance contributions are tax-deductible up to the statutory maximum limit, and a reduced tax rate applies to life insurance payouts.

You cannot claim a tax deduction for your premiums in pillar 3b. However, life insurance payouts are tax-free under certain conditions.

How do life insurance policies last?

Life insurance is a form of long-term financial provision.

In pillar 3a, the term usually lasts until you retire. Payout is possible between five years before and five years after reaching normal AHV retirement age.

In pillar 3b, you are basically free to choose the term yourself. It is usually at least five years for risk-only life insurance policies and ten years for capital-accumulating policies.

When and how is life insurance paid out?

The timing of the payout depends on the type of life insurance:

Risk-only life insurance is only paid out in the event of a claim – i.e. on death or disability.
Capital-accumulating life insurance is paid out when the benefits become due or upon survival at maturity.

The amount of the payout depends on the terms of the life insurance: 

In the case of life insurance with a guaranteed payout, the agreed amount is paid out at a minimum. Non-guaranteed surpluses may also be disbursed.
For life insurance policies without a guaranteed payout, the amount is defined in the contract. Potential factors include fund performance and interest rate developments.

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Can I withdraw my life insurance early?

In pillar 3a, you can withdraw your life insurance early in the following cases:

To finance residential property that you will live in yourself
To buy into a pension fund
When taking up self-employment
Upon emigration from Switzerland
Upon drawing a full state disability pension without disability risk being insured

In pillar 3b, you can terminate your life insurance policy at any time.

GOOD TO KNOW

In the event of early termination, the surrender value of the insurance will be paid out. This may result in financial losses.

What are surpluses in a life insurance policy?

Insurance premiums are calculated based on forecasts of interest rate trends, risks and costs. If it turns out in retrospect that developments have been more positive than expected, surpluses are accrued.

In the case of capital-accumulating life insurance policies, these surpluses are paid out as additional benefits in accordance with statutory requirements. With risk insurance, they are used to reduce the premium.

What happens to life insurance policies in the event of the insured person’s death?

The insured person’s death is what is known as a benefit case. In this situation, the insurance is paid out to the beneficiary – irrespective of how the rest of the estate is divided up.