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11/18/2008
Tuesday morning
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| One of the most vital areas of the Swiss financial markets
is the insurance industry. While Swiss banks are associated with
safety and conservative management, the insurance industry has
not had a single company failure in more than 130 years. This is
a record that surpasses even the steadiness of Swiss banks.
About twenty insurance companies compete in Switzerland.
All are financially sound and managed with an eye for safety and
high return. Usually, the two conditions -- safety and high
yield regarding investments -- are mutually exclusive. High
yield implies risk. Unlike the insurance industries in other
countries, however, insurance companies in Switzerland enjoy
unique tax advantages. Coupled with efficient and intelligent
management, Swiss insurance companies are able to offer a variety
of steady and productive investment opportunities.
Of all the investment options offered by Swiss insurance
companies, annuities provide excellent benefits and can be used
for as. |
| In addition, annuities do NOT get a step up in basis at death. The
untaxed gain in the annuity will be taxable to beneficiaries as Ordinary
Income. By contrast, the unrealized capital gain in a mutual fund is not
taxed to beneficiaries, because their cost basis becomes the market value
of the fund as of the fund owners death. To my mind, this is a HUGE
disadvantage of annuities, and one which should be explained FAR more than
most agents are willing to explain it. In fact, I would go so far as to to
say that IF YOU INTEND NOT TO TAKE ANY MONEY FROM THE ANNUITY - if you
intend to leave the whole thing to HEIRS, YOU PROBABLY SHOULD NOT BUY AN
ANNUITY. A variable LIFE insurance policy might make sense (youd have to
crunch the numbers), but the lack of step up in basis in the annuity
PROBABLY makes it a bad purchase for anyone who is thinking of how much the
HEIRS will get. |
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Most people think of annuities as simply investment
vehicles. When the topic becomes Swiss annuities, however, these
investments take on an added dimension of safety. What most
people dont realize is that Swiss annuities, along with their
competitive rates, steady dividends, and security, offer another
important benefit -- that of asset protection.
In recent years a great many people, including
professionals, directors of companies, and investors (both large
and small), have become increasingly concerned about protecting
their assets from liability claims and creditors. In the past,
those concerned with protecting their wealth would often set up
trusts. Indeed, in response to this growing need, several
offshore companies have begun offering trusts that are designed
specifically to protect ones assets from creditors. Largely
lost amid the hype and various types of investments being offered
are Swiss annuities.
Swiss annuities are products of the Swiss insurance
ind. |
| Annuities also offer a DEATH BENEFIT which MIGHT be of importance. While
the terms of the annuity death benefit vary GREATLY from contract to
contract, the most common is that the contract guarantees to pay to the
BENEFICIARY the GREATER of (a) the amount you paid in (b) or the account
balance at your death. Many annuity contracts include enhanced death
benefits which provide a third factor - (c) the account balance at some, or
any, prior policy anniversary. |
| John Pugsley: Jurg, it seems that I met you sometime around 1978
or 79 at one of the seminars put on by Inflation Survival
Letter... At the time Americans, including those of us who were
convinced that the Swiss franc and gold were headed up, were just
learning about Swiss investments and didnt know much about Swiss
annuities or insurance companies. |
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