Unit-linked Life Insurance

With Zurich's CapitalFund unit-linked life insurance, you can build up assets for retirement. What's more, you can also insure yourself against the risks of disability or death.

Good reasons to choose unit-linked life insurance

Risk protection and potential returns

CapitalFund enables you to invest with a focus on returns, while simultaneously protecting yourself against life risks such as disability or death.

Tax advantages in 3a and 3b

Save on taxes: With pillar 3a, you can deduct your premiums from your income each year. And in pillar 3b, the payout is tax free under certain conditions.

Investment: versatile and flexible

CapitalFund offers you numerous options for your individual investment strategy. You can change this once a year – free of charge.

Save today, fulfill your dreams tomorrow

"Take care of today and tomorrow will look after itself": Yann Sommer is the goalkeeper for the men's national team and knows why a 3a retirement fund is worthwhile right from the start of a career.

Set the course for your future now and save on tax at the same time.

Unit-linked life insurance with a convincing investment offer

By making regular deposits, you can build up your contract's cash value. A selection of investment plans and investment funds with an equity component of 0% to 100% offers the potential for additional returns.

Fluctuating market conditions

The amount paid out to you at contract maturity will vary depending on how the market performs.

Death benefit (optional)*

In the event of the insured person’s death, the beneficiaries receive a lump-sum payout. This can afford financial security for your partners, for example, who enjoy less favorable state benefits than a spouse does. Families can avoid being plunged into financial problems by a stroke of fate, such as not being forced to move out due to mortgage payments, for example.

Information and frequently asked questions about the Unit-linked Life Insurance

What is unit-linked life insurance?

Unit-linked life insurance allows you to invest your savings premium in investment funds. Zurich offers you a choice of numerous first-class investment funds for you to choose from according to your personal return target and your personal risk tolerance.

How is the return on unit-linked life insurance achieved?

The return on your chosen investment fund is decisive for the maturity benefit of your life insurance. Historically, investments in equities achieve the highest returns over a longer period of time compared to other asset classes such as bonds, real estate, commodities, etc., but also have greater price fluctuations. 

Thanks to the chosen insurance solution, dividends are tax free, provided the insurance has been taken out for a period of at least 10 years.

If the CapitalFund insurance is chosen as a single premium, the maturity benefit and the capital gain are also tax free under certain conditions: This is the case if the term of the insurance is at least 10 years and payment is only made after the age of 60 and the contract was concluded before the age of 66. In addition, the policyholder and the insured person must be identical.

What risks are associated with unit-linked life insurance?

Unit-linked life insurance policies may be subject to price fluctuations; depending on the asset class and composition of the fund structure, the investments may fluctuate to a lesser or greater extent and may well lose value in the meantime. That's why a long investment horizon is important here. After all, investing in equities has consistently paid off in the long term over the past 100 years, even in times of war and crisis.

Maturity management ensures automatic risk reduction at the end of the insurance term: In the last few years before maturity, your capital is reallocated to an investment fund with a lower investment ratio. 

If the CapitalFund insurance is chosen as a single premium, a guarantee of 50 or 80 percent of the invested sum can be agreed, which is paid out as a minimum on expiry of the contract. Even if Zurich were to default, this money would be secured thanks to the tied assets.

When is a unit-linked life insurance policy paid out?

With unit-linked life insurance, the current value of your fund investment is paid out at the end of the contract term. If the insurance is terminated prematurely, you will be paid the equivalent value of the units in your fund investments at the time of termination.

If the insured person dies before the contract expires, Zurich will pay the value of the investment at the time of death. If a guaranteed death benefit has been agreed, the agreed amount will be paid out as a minimum.

The value is determined by the value of the units on the day before the written notification of death, at the earliest at the end of the first month following the death.

What are the advantages of unit-linked life insurance compared to buying a fund unit directly?

  1. Insurance coverage: With unit-linked life insurance, death cover can be built in. A fixed sum would then be paid out to the beneficiaries in the event of the policyholder's death. This protection is not available when buying funds units directly.
  2. Tax advantages: In Switzerland, unit-linked life insurance policies can offer tax advantages, particularly with regard to income and inheritance tax. The income from unit-linked life insurance is tax exempt or tax privileged under certain conditions. Income from the direct purchase of fund units is generally subject to income tax.
  3. Long-term savings incentives: Unit-linked life insurance requires a contract to be signed, under which the policyholder agrees to pay a certain premium on a regular basis. This encourages discipline when making deposits and ensures that the long-term savings goal is actually achieved.
  4. Premium exemption: In the event of disability, Zurich assumes the premium payment after a certain waiting period, which means that the long-term savings goal is still achieved.
  5. Privileges:
    a. Protection from debt: If your company has to file for bankruptcy, your life insurance money is not included in the bankrupt's estate and remains protected.
    b. You decide who gets the money: With an unrestricted pension plan, you can determine exactly who receives your money in the event of your death and avoid inheritance or insolvency claims.
    c. Tax advantages: By making contributions to restricted pillar 3a, depending on your situation, you can deduct up to CHF 7,056 or 20 percent (maximum CHF 35,280) of your income from tax in 2024. With the unrestricted pillar 3b, you cannot usually deduct contributions, but the payouts are tax free under certain conditions.

What are the advantages of life insurance?

  • Minimize risk: with life insurance, you can ensure financial security in case of unforeseen events.
  • Private retirement provision: Build up targeted assets with a restricted pension plan (pillar 3a) so that you don't have to accept any reduction to your standard of living later on.
  • Save with tax benefits: With the tax-privileged pillar 3a, you can not only make provision for your retirement, but also save taxes at the same time.
  • Needs-oriented: Thanks to a variety of insurance products, you can find insurance coverage that suits your life situation and your individual needs.
  • Profitable: Life insurance policies offer greater potential returns than conservative investments with low interest rates such as savings accounts – retirement provision is the new saving.
  • Safe savings target: The fixed period and the premium help to achieve your defined goal and secure the capital you have saved for the future.

What are the advantages of unit-linked life insurance?

You participate in the performance of the economy and, with a longer-term investment horizon, have significantly higher return opportunities than with "conservative" savings in a fixed-interest account. In the event of disability, Zurich will pay the premiums for you so that you can still achieve your long-term savings goals.

How are unit-linked life insurance policies taxed?

With a 3a policy, you can deduct the premiums from your taxable income year after year in your tax return and thus significantly reduce your tax burden. In return, you pay tax on the amount paid out. In the case of a 3b solution, the payout is tax free, provided the period of insurance is at least 10 years. 

If the CapitalFund insurance is chosen as a single premium, the maturity benefit and the capital gain are also tax free under certain conditions: This is the case if the term of the insurance is at least 10 years and payment is only made after the age of 60 and the contract was concluded before the age of 66. In addition, the policyholder and the insured person must be identical.

You can find tax tips for pillar 3b in our guide to saving taxes and in our article on the topic of pillar 3a tax payouts.

How flexible is CapitalFund during the contract term?

CapitalFund is very flexible:

  • After three (pillar 3a) or five (pillar 3b) years, you can take a premium break – with full insurance coverage.
  • You benefit from a coverage extension guarantee and can increase your premium at various times without a new health check: on marriage, birth of a child, purchase of a home or simply every 3 years.
  • If you become unemployed or are no longer working, you can switch from pillar 3a to pillar 3b – at no additional cost.
  • With a 3a policy, you have the option of making an additional payment once a year. This is interesting for self-employed people without a pension fund, among others, who can only calculate their income at the end of the year.
  • You can extend the term of your 3a insurance until regular OASI retirement age – or even up to five years beyond that. Prerequisite: You must provide proof of earnings from gainful employment.

How flexible are unit-linked life insurance policies in terms of premium payments and fund selection?

Zurich's unit-linked life insurance policies such as CapitalFund are very flexible: You can switch funds once a year free of charge. You also have the option of taking a premium break, switching from 3a to 3b free of charge if you take a career break or become unemployed, and making a voluntary additional payment once a year into the 3a solution if you want to increase your savings contribution further.

Whether someone perceives the fixed contract term and the agreed premium as a restriction depends on the person: it encourages financial discipline and helps policyholders to achieve their savings goals thanks to regular payments.

What are the fees and costs of unit-linked life insurance?

On balance, the insurance solution can be more advantageous than the bank solution, despite the acquisition and administration costs. This is because banks also charge fees, but their solutions are less advantageous from a tax point of view than insurance solutions.

Can I cancel or redeem a unit-linked life insurance policy?

You can terminate your life insurance if you have an unrestricted pension plan. You will receive what is known as the "surrender value" of the policy. But think carefully: It is often worth taking out a policy loan in the event of a financial bottleneck, for example. If you cancel the contract, you will lose your risk cover and possibly also money. Find out what alternatives you have to termination.

In the case of restricted pillar 3a life insurance, it is often worth taking a premium break. Withdrawing the money in cash is only possible under certain circumstances, such as when moving abroad or buying a home for your own use. Take a look at other termination options here. 

Restricted or unrestricted pension plan possible

  • If you take out this unit-linked life insurance as part of pillar 3a (restricted retirement provision), you can save for old age and deduct your premiums from your taxable income year after year. 
  • In Pillar 3b (unrestricted retirement provision), you benefit from a tax-free payout if certain conditions are met, and you have more freedom in terms of the amount paid in, the beneficiaries and the duration of the contract. In both cases, you can choose your lump-sum death benefit flexibly.

Flexible options in all phases of life

  • With this unit-linked life insurance, the risk cover can be adjusted every three years or in the case of special events such as marriage or the purchase of residential property without a new health check.
  • You can pause your pillar 3a premium payments for up to three years, for example to take a career break after the birth of a child.
  • Protection in the event of disability can also be insured with fund savings.
  • You can withdraw your capital in three ways: It can be paid out or transferred to an account with preferential interest or your fund units can be transferred to a private investment account.
  • If you take a career break or become unemployed, you can convert your 3a insurance into a 3b insurance policy.

Potential returns and investment concept

The investment portion of your insurance is invested in first-class investment funds of your choice. You can choose from all of Zurich Switzerland's investment plans. You can choose between various asset classes, such as equities, bonds, real estate and commodities. 

With selected investment plans, your money is invested according to the same principles as the assets of major investors. You benefit from interesting cost advantages. For each investment plan, we select the best fund managers from our partners for you – worldwide and independently.

Whether you are a conservative or risk-tolerant investor, you are sure to find the right offer for you. And if your needs change, you can switch to a different investment plan: once a year, free of charge.

At the end of the contract, you decide whether Zurich should pay you the equivalent value of your fund units directly or transfer them to your personal custody account. 

Cover in the event of death

For the entire term of the contract, your family and/or your beneficiaries are covered by a guaranteed minimum benefit in the event of death. If the value of the investment exceeds the insured lump-sum death benefit in the event of a positive market development, the higher value is paid out to the beneficiaries in the event of a claim.

Preferential rights in bankruptcy proceedings

Even if you get into financial difficulties, your insurance money is always protected: In pillar 3a, the money invested is tied up until maturity and cannot be touched by any creditors. Unless the policy was pledged to the bank as security when purchasing residential property. With pillar 3b, your investment assets are also protected in the event of bankruptcy and remain yours. This cover applies not only to you as the policyholder, but also to your spouse/registered partner or descendants.

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