Instant Liquidity
Another
important feature of Swiss annuities is instant liquidity. Most
annuities don't offer this. In a Swiss annuity account all capital,
plus all accumulated interest and dividends, is accessible after the
first year without penalty. Unlike most American annuities, if you need
your funds for an emergency or wish to make another investment, you are
not prevented from obtaining your money and you are not subjected to
high penalties.
Most Swiss life insurance companies have a simple process for withdrawals, loans, or complete surrenders. This process requires minimal paperwork. You will have your funds wired directly to your bank within two to three weeks from the time they receive the paperwork.
Both Swiss annuities and American annuities have back-end deferred penalties when you withdraw more than a certain amount of money or when you withdraw the money too early in the contract period. However, Swiss annuities have a much lower penalty and much shorter penalty period than do American annuities. A typical American annuity might have 5% to 15% penalties for withdrawals over a period ranging from five to 15 years.
Many investors are excited about the low fees charged on Swiss annuities and Swiss life insurance. American annuities have much lower fees than American life insurance policies, but still they are usually more than twice as high as the expenses on a Swiss annuity.
In addition to saving investors money on fees, Swiss annuities offer more liquidity than American annuities in another important way. With a Swiss annuity, you can borrow out your money any time you want. Some Swiss life insurance companies will allow you to borrow up to 90% of the value of your annuity. If you have a Swiss annuity worth $1 million, you can get your hands on more than $900,000 of it almost instantly, with no company penalty, simply by taking out a loan.
Swiss annuities offer no "load fees," low surrender fees on withdrawals, short surrender periods, loan privileges, and the option of taking lifetime income. Access to your money is truly a hallmark of the Swiss annuity.
Darrell Aviss is managing director of SwissGuard International, an asset protection specialist firm based in Zurich, and is the author of Strategies for Protecting Wealth.