Death insurance: how it works and what does it cover?

What is death insurance?

Death insurance pays out a capital sum to designated beneficiaries when the insured person dies. Its main objective: to financially protect loved ones by compensating for the loss of income.

Not to be confused with life insurance, which combines savings and protection. Death insurance focuses solely on protection in the event of passing.

In Switzerland, it complements the benefits of the 2nd and 3rd pillars. To understand the differences between these schemes, consult our guide Life and death insurance: how it works in Switzerland.

The different types of death insurance

Several death insurance options exist in Switzerland, each suited to specific needs. The choice depends on your family situation, your wealth objectives and your budget.

Three main categories stand out: term insurance, whole life insurance and cover linked to the 2nd pillar.

Term death insurance

This option covers a defined period: 10, 20 or 30 years. Ideal for protecting your family during critical years (repaying a mortgage, children's education).

Advantages: lower premiums, flexible duration. Limitation: no payment if death occurs after the contract expires.

Whole life death insurance

The death cover remains active until death, regardless of age. Payment of the capital sum is guaranteed.

Advantages: absolute security, building transferable wealth. Disadvantage: higher premiums.

Particularly suited to estate planning and wealth transfer.

Death insurance linked to the 2nd pillar (LPP)

Occupational pension provision automatically pays a death capital to priority beneficiaries defined by law (spouse, children, registered partner).

The amount varies according to your pension fund regulations. This benefit is part of a range of financial assistance after a death in Switzerland.

How does death insurance work in Switzerland?

The mechanism is simple: you take out an insurance contract, pay regular premiums (monthly, quarterly or annual), and your beneficiaries receive the planned capital sum upon your death.

The amount of capital and the conditions are fixed from the outset. No surprises for your loved ones.

Subscription and access conditions

Access to death insurance depends on your age (generally between 18 and 65) and your state of health. A medical questionnaire is systematic.

Certain exclusions apply: pre-existing illnesses, undeclared high-risk activities. Transparency is essential to avoid a subsequent refusal of payment.

Designation of beneficiaries

You freely designate your insurance beneficiaries: spouse, children, partner, or any other person. An order of priority can be established.

Remember to update the beneficiary clause after each major life event (marriage, divorce, birth). This update ensures that the capital goes to the right people.

Amount of death capital

The amount of death capital is calculated according to your actual needs: monthly expenses, outstanding debts, children's education costs, funeral expenses.

Indicative ranges: between 50,000 and 500,000 CHF depending on situations. Precise calculation avoids over-insurance (unnecessary premiums) and under-insurance (insufficient protection).

What does death insurance cover?

Death insurance generally covers death whatever the cause: illness, accident or natural death. Some contracts also include total disability.

But beware of exclusions. Reading the general conditions carefully avoids unpleasant surprises at the time of payment.

Covered situations

Most insurance contracts cover death by illness, accident or natural cause. Some options include total and permanent disability.

Possible additional benefits: premium waiver in case of loss of earning capacity, doubling of capital in case of accident.

Exclusions and limitations

Suicide is generally excluded in the first year. Undeclared extreme sports, acts of war or terrorism may also be excluded.

A waiting period (period without cover) may apply. Read the general conditions before signing to know precisely the limits of your contract.

Payment deadlines and procedures

After a death, beneficiaries must contact the insurer and provide the required documents. The payment deadline begins upon receipt of the complete file.

The process is regulated by law to protect families and guarantee a rapid death benefit.

Necessary documents

To trigger payment of the capital, beneficiaries must provide:

• Official death certificate
• Beneficiary's birth certificate
• Original insurance contract
• Identity document
• Depending on the case: medical certificate or police report (accident)

Payment deadlines

In Switzerland, the legal payment deadline is generally 30 days after receipt of complete documents. Some insurers offer a rapid advance payment.

In case of delay or dispute, contact the insurance ombudsman. The law protects beneficiaries against unjustified delays.

Taxation of death insurance in Switzerland

The taxation of insurance for death varies according to the relationship between the insured and the beneficiary, as well as according to the canton.

The capital from pillar 3a is taxed separately at a reduced rate. Pillar 3b often benefits from exemptions for spouses and children.

As taxation is complex, consult a specialist to optimise the transfer.

How to choose your death insurance wisely?

Choosing suitable death insurance requires precisely assessing your needs, comparing offers and taking out cover at the right time.

Three essential criteria: your actual needs, the quality of the contract and the timing of subscription.

Assess your actual needs

Ask yourself the right questions: what is your family situation? Do you have debts (mortgage, loans)? What income must the capital compensate for?

Take into account your existing cover (LPP, 3rd pillar). Precise calculation avoids paying for unnecessary or insufficient protection.

Compare offers

Compare insurance contracts according to several criteria: premium amounts, extent of death cover, exclusions, financial strength of the insurer, flexibility.

Use online comparison tools or call on an independent broker. Don't stop at the price: the quality of cover matters just as much.

When to take out death insurance?

Key moments to take out cover: property purchase, birth of a child, business creation, marriage.

The younger and healthier you are when you take out cover, the more advantageous the premiums. Don't wait for health problems to appear: access conditions tighten and premiums increase.

Death insurance and funeral organisation

The death capital can be used to finance the funeral, but it is paid to the beneficiaries, not directly to the funeral directors.

Insurance does not replace communicating your wishes. Remember to inform your loved ones of your wishes.

To announce a death and honour the memory of a loved one, publish an obituary on Wolky for 180 CHF. Simple, accessible 24/7 and easy to share with those around you.

Death insurance represents an essential protection tool for financially protecting your loved ones in the event of passing. Whether it is term cover, whole life or linked to the 2nd pillar, each option responds to specific needs according to your family and professional situation.

The choice of death insurance must take into account the amount of capital required, the beneficiaries to be designated and any exclusions. Comparing offers and anticipating administrative procedures ensures a smooth transfer of capital. Don't forget that payment deadlines and taxation vary according to the type of contract and the relationship with beneficiaries.

Beyond financial aspects, preparing for the future also includes facilitating communication with your loved ones. Publishing an obituary on Wolky enables you to quickly inform those around you and create a memory space accessible to all, 24 hours a day, for a transparent fee of 180 CHF.