Life insurance: protect your loved ones and inheritance
18 November 2025 | Comment(s) |
Santiago Mouriz Moreno
In the sometimes complicated world of individual insurance, the question of inheritance naturally arises. Far from being a taboo subject, it deserves to be addressed with clarity and peace of mind.
Life insurance is much more than just a financial tool: it allows you to transfer capital assets within a secure legal framework, while protecting your loved ones financially. In this article, discover how life insurance can be integrated into your estate planning, thereby guaranteeing that your family and beneficiaries have a secure future.
Pure risk insurance and savings: two approaches to protection
Life insurance includes pure risk coverage and combined savings and risk coverage. Pure risk life insurance focuses on the essentials: covering the risk of mortality, without the need for long-term savings. Life insurance with savings combines security with life planning. It allows you to prepare for retirement while ensuring that your capital is passed on to your loved ones in the event of your death. Everyone has their own vision of financial security. The important thing is to choose the one that suits your life circumstances!
Life insurance: a valuable asset for your inheritance
When we talk about life insurance, we often think of a savings product that can also include coverage for loss of earning capacity and death. However, its role goes far beyond that: in terms of inheritance, it is a simple, quick and secure solution for transferring your capital assets to your loved ones.
Funds available quickly
Unlike traditional estate assets, the capital from a life insurance policy is paid directly to the designated beneficiaries, without the need for lengthy estate settlement procedures. As a result, your family will have quick access to the inheritance in the form of funds, usually within just a few weeks.
Protection for your loved ones
By designating your spouse or children as beneficiaries, you can guarantee their financial security, particularly when it comes to meeting immediate expenses (housing, education, debts, etc.). This capital is paid in addition to the traditional inheritance, without affecting the other heirs.
Targeted transfer
Life insurance offers valuable freedom: the freedom to directly designate the beneficiaries of the capital, without it being automatically distributed among all legal heirs. This flexibility allows you to preserve real estate, support a particular child, or secure the transfer of assets or a family business. It is a strategic resource for those who wish to combine financial protection with a clear estate plan.
Understanding how life insurance works in the event of death
Beneficiary clause
This is the core of the life insurance contract. The beneficiary clause allows you to designate one or more persons who will receive the capital upon the death of the insured. When properly drafted and kept up to date, it ensures that your loved ones are protected according to your wishes and also guarantees that your contract does not become a source of dispute.
Life insurance and compulsory inheritance in Switzerland
In the case of life insurance in the form of a 3a pillar, certain heirs (such as spouses and children) are entitled to a compulsory inheritance, i.e. a minimum share of the inheritance that they are legally entitled to. For voluntary pension plans (3b pillar), the designation of beneficiaries and the terms and conditions of the statutory inheritance and transfer are more flexible.
What happens if no beneficiary is designated?
For tied pension plans (3a pillar), even if no beneficiary is designated, the capital will automatically be allocated according to the legal order. For untied 3b pillar insurance, the insured person is free to designate their beneficiaries. If no one is designated, the capital assets fall into the estate and will be distributed according to the law like any other asset.
Optimise taxation and avoid conflicts
Tax advantages by canton
In Switzerland, the tax treatment of life insurance varies from canton to canton. In many cases, the death benefit is tax-exempt for direct beneficiaries (spouses, children). For other beneficiaries (friends, cohabiting partners), inheritance tax may apply. It is advisable to check with your cantonal tax office or pension advisor.
By taking out life insurance in the form of 3a pillar (tied pension provision), you can also save on tax each year. The payments made are deductible from your taxable income. In some cantons, tax deductions can also be made with the 3b pillar insurance.
Limits and exceptions to capital outside the estate
Life insurance capital is in principle outside the estate, which means it can be freely transferred to the beneficiaries named in the contract. However, if the premiums paid are considered disproportionate to the overall estate, the heirs may contest the contract.
Best practices for avoiding disputes
- Draft a beneficiary clause that is clear, up to date (after each life event) and unambiguous.
- Inform your loved ones of the existence of the contract
- Avoid excessive payments at the end of your life
- Check consistency with your will (bequests) or inheritance agreement in terms of percentages and compliance with the legal framework
- Keep a written record
Key steps for setting up your life insurance policy successfully
- Choose the right policy: type (savings, risk, mixed), term, capital, payment, 3a pillar (tied) or 3b pillar (untied).
- Designate beneficiaries: names, dates of birth, shares, updates in the event of family changes.
- Plan your estate: ensure consistency with your will (bequests), with the help of an adviser or solicitor.
Setting up a pension plan with Groupe Mutuel
Groupe Mutuel offers private pension solutions tailored to all your needs and life situations:
- Families with young children: to guarantee capital assets to finance their education
- Unmarried couples: to protect your partner outside the legal framework
- Business owners: ensuring business continuity in the event of death
- Protect your loved ones in the event of death or incapacity to work due to accident or illness
- Build up transferable savings
- Save on taxes, particularly through pillar 3a life insurance
Want to cover the risks? Contact our pension specialists and submit your questions about life insurance and inheritance!
FAQ – Life insurance and inheritance
- Who inherits life insurance in Switzerland?
The beneficiaries designated in the beneficiary clause. If there are no beneficiaries, the capital becomes part of the estate and will be distributed in accordance with civil law.
- Is life insurance subject to inheritance tax?
This depends on the canton and the relationship between the insured person and the beneficiary. The good news is that spouses and children are often exempt.
- How can the beneficiary clause be changed?
It's simple: a written request to the insurer is all it takes to designate a new beneficiary or change the distribution of the estate.
- What protection does life insurance offer?
It can cover the pure risk of death or incapacity to earn an income, or combine these risks with individual savings available for retirement, buying a home or starting a self-employed business.
- Does life insurance offer tax savings?
Yes, life insurance can help you save on taxes. By choosing a tied pension solution (pillar 3a), you can deduct your annual financial contributions from your taxable income and reduce your tax burden.
