Understanding Swiss Annuities

While it might be an unusual time to provide an explanation of Swiss annuities given what has been taking place of late with the Swiss franc and related decisions made by the Swiss National Bank, it still makes sense for any financial services consumer to understand potential benefits of these products.

Switzerland - Courtesy of Travellingtamas

A Swiss annuity is an annuity provided or “issued” by a Swiss insurance company.  Swiss annuities come in several forms such as fixed immediate, fixed deferred and a form that allows the owner to direct independent investments.  Swiss annuities are often—although not always—denominated in Swiss Francs. 

Currency strength and asset protection are generally considered to be the main benefits of a Swiss annuity. 

The Swiss franc has been a rock of stability in a world of price inflation and depreciating currencies.  Inflation erodes purchasing power and is especially harmful to people (such as annuity owners) who receive fixed payments.  In contrast, a strong and stable currency preserves and even enhances purchasing power. 

Consider, for example, the following chart that shows the appreciation of the Swiss franc relative to the US dollar since January 1, 1999.

Swiss Franc Versus US Dollar 

Or look at the chart below which represents the franc-dollar relationship in terms of US dollar depreciation.

US Dollar Versus Swiss Franc 

On the asset protection front, Swiss annuities (and life insurance policies) are protected from creditors who may to pursue an individual’s assets through legal proceedings such as a bankruptcy or lawsuit.  

There are certain rules that need to be followed with respect to beneficiary designations, but Swiss law does appear to provide annuity and life insurance policy owners with full protection from creditors as long as the transaction does not involve fraudulent conveyance. 

Additional points to consider in light of Swiss annuities—some of which are related to currency stability and asset protection—include: 

  • The strict privacy laws that apply to Swiss banking also apply to insurance transactions. 
  • No Swiss insurance company has ever gone bankrupt. 
  • The Swiss insurance industry has very high (conservative) capital requirements. 
  • Swiss annuities have relatively low fees. 
  • Swiss annuities have attractive liquidity provisions. 
  • A US annuity or life insurance policy can be exchanged for a Swiss annuity or life insurance policy through a tax free Section 1035 exchange
  • Switzerland runs a budget surplus. 
  • Switzerland has not been involved in over 150 years. 
  • Switzerland’s constitutional right of referendum makes it a model of legislative stability. 
  • Switzerland has one of the highest per capita incomes in the world. 
  • Switzerland has the highest percentage of millionaires in the world. 
  • While the timing may be terrible, one Swiss company now offers “The Swiss Gold Annuity” which allows for the annuity’s assets to be spread among various gold investments. 

Some of the downsides and related considerations include: 

  • Currency risk.  Until the past couple of days, the Swiss franc has been on a tear.  This consistent and rapid currency appreciation is a challenge for Swiss businesses and policy makers.  The strength of the Swiss franc makes it difficult for Swiss businesses to maintain competitive pricing on exports.  The recent decision by the Swiss central bank to impose a ceiling on the value of the franc is a testament to this difficulty. 
  • Interest earnings on Swiss annuities are taxable as ordinary income for US citizens.  
  • Swiss annuities present a large psychological hurdle.  It is hard enough for most would-be annuity buyers to make the decision to hand over a portion of their life savings to an insurance company in their own country.  Add the uncertainty of a foreign insurance company, foreign laws, foreign currency and foreign insurance broker to the mix, and the decision can understandably be overwhelming.



I wonder if these Swiss Annuities will lose a little luster now that the Swiss have devalued their currency. Still the only currency in the world that has a large portion backed by gold, but tying anything to the euro right now seems outlandish.


For the most part this is a well-informed article, but in my humble opinion the author is wrong when he states that the timing is "terrible" to shift assets to gold-backed investments. With many currencies undergoing a drastic reduction in their purchasing power, now seems an ideal time to invest in gold and hedge against further currency devaluation. I'm curious what the author meant by this statement. Any further explanation would be greatly appreciated...


I love the information you provided on Swiss annuities. It seems like the benefits outweigh the downsides. I've been looking into Swiss annuities after reading your post and your mention of a "Swiss Gold Annuity" was rather intriguing. After typing that exact phrase into Google, I believe I found the company that is providing this annuity. I was wondering what your input on it was swissannuities.net.

That's the website I came across in my search. I'm hoping to invest in a Swiss annuity in the near future. Any advice on this "Swiss Gold Annuity" or Swiss annuities in general? Is this provider trustworthy? Any advice would be greatly appreciated!!!

Walter Steinberg

Thanks for the feedback Walter.

The following is a source of information on the Swiss Gold Annuity:


Thank you for responding Tom!

I've run across the Gronthier Group in my research for the Swiss gold annuity. What are your thoughts on it? Why would you consider it bad timing? Is it something you would suggest to others? I understand that investments are different depending on the individual, but as a professional, what are your conclusions?

Hi Tom, I have 6 swiss variable deferred annnuities with swiss life liechtenstein which have actually gone down in value. They are in the accumulative phase now for another 20 years. I have filed all the fbar forms for it and also plan to file the form 8938 this year. are these swiss annuities viewed as a potential problem by the irs? I have been filing the fbar now for the past 4 years inspite of the confusing rule whether these need to be reported, the latest fbar rules from 2011 does specifically mention that these need filing of fbar but do these invite a higher risk of audit? can these be brought back to the USA in a 1035 exchange with a US insurance company, my understanding is that Swiss Life AG is a topnotch insurance company.