The 3rd Pillar 3B
The 3rd pillar 3B is an insurance savings solution combining income potential and/or security and offering coverage options in the event of death or disability.
This type of 3rd pillar has no limit amount and can be in the form of periodic bonuses or single bonuses (invested capital). The duration is free. It is therefore used to carry out your projects over a period of time that you define.
This solution is more and more in demand and we explain the reasons for it to you.
The advantages of the 3rd pillar 3B
The first thing to know is that you can withdraw the assets from a 3rd pillar 3B (cash value) at any time and without constraints, unlike the 3A. You can also receive a loan on your own insurance policy (for example, instead of leasing) at a favorable rate.
You benefit from completely flexible insurance coverage in the event of death and/or disability and the beneficiary clause is completely free. You therefore have the option of covering the legal or natural person you want, in the proportions you choose. However, pay attention to inheritance tax in some cantons.
Unlike the 3A, this solution can be put as collateral for any type of real estate purchase or even for commercial credit.
This solution is regularly used for savings plans for children as an alternative to a savings account that no longer brings in anything.
3B taxation?
3rd pillar 3B taxation is very favorable, especially in some cantons such as Fribourg or Geneva. In these cantons, the bonus can be deducted from your taxable income and therefore generate a significant tax gain, without the obligation to withdraw! You therefore have the equivalent of a traditional savings account, with no withdrawal conditions, which provides a return thanks to tax deductions, a return in all cases greater than the very low interest rates offered by banks today.
Protection in the event of a 3rd pillar 3B bankruptcy
If you name your spouse or child (ren) in the beneficiary clause of a 3B, you are covered by the insurance policy against bankruptcy. (The police do not fit into the bankrupt estate). This protection is therefore very useful for self-employed persons who take the risk of bankruptcy on their private assets.
The succession of the 3B?
In the event of death, the capital of a 3rd pillar 3B enters into the estate fund (except in the case of insurance with only death coverage, called pure risk) and it is therefore wise to seek appropriate advice according to your canton of residence, in order to avoid unpleasant surprises.
