Third Pillar, better bank or insurance?


A choice that must be evaluated very well.

Choosing between an insurance 3rd pillar or a banking one, depends, above all, on the purpose with which we do it.
We can say that the most important difference between a bank and an insurance lies in what is called "WAIVER OF PREMIUM FOR DISABILITY".
This coverage, typical of insurance, means that in the event of disability, the insurance company pays the premiums for you until the contract expires (that is, until the ordinary age of retirement).
A concrete example: Mr. Rossi, 30 yeras old, starts today to pay CHF 3,000 / year in a 3rd pillar banking account, while Mr. Bianchi, also 30 years old, pays CHF 3,000 with an insurance third pillar. Since both have 35 years to retirement, we can say that both should arrive at 65 years old with a capital of CHF 105,000 (not including interest, surpluses, etc.). But, what if they both become disabled only after, for example, 7 years of payments? Well,Mr. Rossi, who has paid his third pillar for 7 years in a bank account, will receive when he retires CHF 21,000 (plus interest).
Mr. Bianchi instead, who paid his insurance 3rd pillar for 7 years, when he retires will receive CHF 105,000 (plus surplus evv)..
This big difference is produced by the WAIVER OF PREMIUM FOR DISABILITY.
This is why, for those who still have many years before retirement, the insurance 3rd pillar, or a mix between insurance and banking, could be the right choice.
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