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Swiss Asset Protection: Annuities in Switzerland |
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Laws of various jurisdictions bears a lot of weight on how annuities and life insurances can be best protected against seizure by collection agencies in case of financial difficulties such as in bankruptcies. Switzerland provides the best asset protection laws when it comes to this area because of its comprehensive and tight laws on creditor protection.
There is also a government agency which oversees products such as life insurance policies, which is also covered by existing laws. These agencies protect investors from debt collection processes filed against owners of such insurance policies. What happens is that these investments are not included as part of the investor’s bankruptcy estate regardless of the existence of a court judgment from a foreign country, which clearly instructs that these Swiss life insurances and annuities be delivered in favor of the debt collector. In addition, the law clearly states that the law of the country of the issuing company applies to issues between the policy owner, which could either be foreign or local, and the insurance contract issued in Switzerland and the issuing company.
When it comes to Swiss annuities, statutory protection from debt collectors will depend on the official designation of beneficiaries, specifically if they are revocable or irrevocable. In case beneficiaries are designated revocable, protection is provided if beneficiaries are close relations of the owner, i.e. husband or wife and/or direct descendants. In conditions like these, asset protection can be enjoyed by the owner, and if the matter was resolved, the owner can opt to revoke the designation originally assigned and go through liquidation procedures for the policy. Automatically, Swiss laws would transfer the ownership of the contract to the beneficiaries in case of bankruptcies. Essentially, the owner no longer possesses the contract and will provide immunity to the contract from being collected by collectors.
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