Cancel annuity insurance 2026: surrender value, tax trap & the question that decides thousands

For a capital withdrawal from your pension, your canton of residence alone decides up to CHF 24'000 in tax (on CHF 500'000: AI CHF 25'700 ↔ AR CHF 49'550). And whether you can get out at all depends on one moment: as long as your annuity insurance is in the deferral phase, you can cancel and get the surrender value, in the early years often just a fraction of your premiums. Once the annuity is running, the door is usually shut: no buy-back, no cancellation.

🧭 Deferred or running? This one question decides everything

In the deferral phase you can cancel and get the surrender value; once the annuity is running (annuity phase), a classic life annuity is generally neither cancellable nor surrenderable, the money has been converted into a lifelong payment, and there's no getting out. That phase changes everything and is the trap almost no one explains beforehand: so clarify first which phase your annuity insurance is in.

The second decisive point is the pension pillar. A pillar 3a annuity insurance is tied: even if you cancel it, the capital moves to a vested-benefits or new 3a solution, a cash payout only happens in legal cases (home ownership, self-employment, permanent emigration, pension-fund buy-in, full disability). A pillar 3b policy, by contrast, is freely available. Both are VVG contracts, but tax and availability differ fundamentally. Which one you have is in your policy. Check it before you sign anything.

⚠️ The surrender-value trap, and why cancelling early hurts

If you cancel a deferred annuity insurance in the early years, you receive a surrender value far below the premiums paid; that's exactly the mistake that costs Swiss people millions every year. Reason: in the early years your money first goes to acquisition and administration costs (Zillmerisation), barely into the savings capital. Anyone getting out after three years has often lost thousands of francs, for a pillar 3a policy the surrender value can even be near zero at the start. Hence the rule, according to ConvivaPlus: cancelling an annuity savings contract is often the most expensive way out. Which insurer puts the most obstacles in your way on exit? You'll read it in the ConvivaPlus Cancellation Index below, our own analysis across several Swiss providers. If you're reviewing several contracts, find the VVG logic in the cancel-insurance guide and the close cousin in cancel life insurance.

💰 The tax trap: what shifted in 2025

For a private life annuity (pillar 3b), the rule of thumb used to be that 60 % counts as a tax-free return of capital and only 40 % of the annuity as taxable income; this is the tax almost everyone overlooks, yet it decides more than the premium. Since 1 January 2025, that's no longer fixed: the taxable share now depends on the interest-rate level, with low rates it can be significantly below 40 %. In other words: anyone drawing a running life annuity is often taxed more favourably than before under the new model.

It's different for pillar 3a: if you dissolve a 3a annuity insurance or have it paid out (in a legal case), a one-off capital-withdrawal tax applies, separate from the rest of your income, at a reduced rate. Here, timing matters: spreading withdrawals over several tax years (multiple 3a accounts) breaks the progression and pays less overall. In short: for annuity insurance it's not only whether you cancel that counts, but when, and in which pillar. The ConvivaPlus reflex: before cancelling, always ask for both numbers, surrender value AND tax consequence. Look only at the payout and you'll get the bill the following spring. The key facts on the third pillar are explained by the federal government on ch.ch.

⏱️ Notice periods: when (and whether) you can get out

After 3 contract years, in the deferral phase, VVG Art. 35a lets you cancel anytime with 3 months' notice to the end of any year, even with a long term; before that the ordinary notice is usually 3 months, and a running annuity can almost never be cancelled. For a pillar 3a, though, "cancel" doesn't mean "money now": the capital stays tied and moves to a vested-benefits or new 3a solution, unless a legal exception applies.

📝 Cancel annuity insurance in 5 steps

If you're in the deferral phase and, after weighing surrender value, tax and alternatives, you really want out, here's how to do it safely and without a nasty surprise.

1. 1
   Clarify phase & policy typeDeferral phase or annuity already running? Pillar 3a or 3b? It's in your policy. If the annuity is already flowing, cancelling is usually impossible, the rest becomes moot.
2. 2
   Request the surrender valueDemand the current surrender value and the likely tax consequence from the insurer in writing. Only with this number can you decide whether cancelling makes sense.
3. 3
   Calculate the alternativesCompare: surrender value vs. making paid-up (VVG Art. 90) vs. a 3a transfer to a cheaper provider. You often get significantly more than with a cancellation.
4. 4
   Draft the letter & register itIf cancelling is the right choice: generate the template below with policy number and date, and send by registered mail. What counts is receipt at the insurer, not the postmark.
5. 5
   Check statement + taxesDemand written confirmation with the end date, surrender-value statement and transfer destination. For 3a: plan the capital-withdrawal tax and stagger withdrawals if possible.

Note: journalistic guidance based on the VVG, pension and tax law, not legal, tax or pension advice. Your contract, the GTC and your personal situation are decisive. Especially for annuity insurance, pillar 3a and running annuities, independent advice is worth it before cancelling.

For an annuity insurance, it's not whether you cancel that matters, but in which phase and which pillar. Get it wrong and you either give away the surrender value or pay tax you needn't.

The ConvivaPlus cancellation index rates the major Swiss insurers by cancellation hurdle (online form versus mandatory letter, deadlines, response time), based on the ConvivaPlus analysis of the official information. At a glance you see with which provider exiting annuity insurance is easiest.

[Name]

AXA

2026-07-06

Cancellation of insurance contract – policy no. [policy no.]

Dear Sir or Madam,

I hereby cancel my insurance contract (policy no. [policy no.]) within the deadline, at the next possible date. Please confirm the cancellation in writing.

Kind regards

[Name]

Written by

Miriam Frei

ConvivaPlus Editor · Law & Housing

Writes about tenancy, contract and everyday law – legal texts turned into vetted templates.

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