Switzerland's mandatory insurance system provides reasonable base coverage for death and disability — AHV/IV pays state pensions, BVG pays occupational disability and survivors' pensions, and UVG covers accidents at work. But "reasonable base" is not the same as "adequate replacement income." Private life and disability insurance closes the gaps between what the state provides and what your family actually needs.
The relevance depends strongly on your life stage and situation. A single 28-year-old with no dependents and solid BVG coverage has minimal need for additional life insurance. A family with a mortgage, two young children, and a self-employed breadwinner is significantly underinsured without it.
What the mandatory system already covers
Before buying anything private, understand what you already have:
| Event | Mandatory coverage | Typical gap |
|---|---|---|
| Death (employee) | AHV survivors' pension + BVG partner pension (60% of projected) | Coverage often 40–60% of income |
| Disability — accident | IV pension + UVG disability pension (up to 80% of capped salary) | Gap above CHF 148,200 cap |
| Disability — illness | IV pension + BVG disability pension | 30–180 day waiting period with no income |
| Short-term illness | Employer must pay salary for limited period (Lohnfortzahlung) | Ends after weeks/months by law |
Illness disability is the biggest gap for employees
Daily sickness benefits insurance (KTG/Krankentaggeld)
KTG (Krankentaggeldversicherung) covers income replacement during extended illness — it bridges the gap between employer salary continuation and IV/BVG benefits.
- Employer-provided KTG: Many employers arrange collective KTG for their staff. Check your employment contract. If your employer has a KTG policy, you're covered even without arranging it yourself.
- Individual KTG: If your employer doesn't provide it, or you're self-employed, you arrange it privately. Typically covers 70–90% of salary for 1–2 years after a waiting period (30–180 days).
- Cost: CHF 40–150/month depending on waiting period, benefit level, and age.
Term life insurance (Todesfallversicherung)
Pays a lump sum to your beneficiaries if you die during the policy term. This is the simplest and usually most appropriate form of life insurance for families.
Key uses:
- Replace lost income for a surviving partner and children
- Pay off a mortgage so your family can remain in the home
- Fund children's education
- Cover funeral and estate costs
In Switzerland, term life premiums are notably low due to strict actuarial regulation. A 35-year-old non-smoker can typically get CHF 500,000 coverage for 20 years for CHF 25–50/month.
Buy term, not whole life
Disability income protection (Erwerbsunfähigkeitsrente)
Private disability income insurance supplements or replaces IV and BVG pensions. Especially relevant for:
- High earners above CHF 148,200/year — UVG only covers up to this cap; the rest is uninsured without private cover.
- Self-employed — no BVG, limited IV, no UVG (unless voluntarily insured). Disability would be catastrophic without private coverage.
- People in physically demanding jobs — higher probability of needing it.
Cost depends heavily on occupation (doctors and lawyers pay more than office workers), age, and benefit level. Typically CHF 60–200/month for CHF 3,000–5,000/month of benefit.
Life insurance through Pillar 3a
Some Pillar 3a insurance products bundle life and disability coverage with retirement savings. The advantage is the tax deductibility of premiums. The disadvantage is inflexibility — fixed premiums, limited investment returns, and high surrender costs if you stop paying.
This can make sense for self-employed individuals who need both retirement savings and risk coverage in a single tax-efficient package. For employees with solid BVG coverage, a separate low-cost Pillar 3a investment account plus a standalone term life policy is usually better.
What most expats actually need
Based on typical expat situations in Switzerland:
- Single, no dependents: Check if employer has KTG. If yes, usually nothing extra needed. Life insurance: unnecessary.
- Couple, no children, both employed: KTG if not employer-provided. Term life optional unless you have shared debts.
- Family with children: KTG essential. Term life strongly recommended — the surviving partner's AHV/BVG pension will not replace lost household income for long. Consider CHF 300,000–800,000 sum insured based on income and mortgage.
- Self-employed: KTG and disability income protection are priority. No employer covers your sick days. Term life if you have dependents.
Our free risk analysis assesses your life and disability coverage gaps based on your employment type, family situation, and income.