Life insurance vs. FSMO: A comparison to secure your children's future.

At MotherStories, we see prevention as an essential pillar of our mission. Dealing with issues such as death and disability is never easy, but they are an integral part of parenthood. It's crucial to be prepared for the unexpected, because it doesn't just happen to other people. Every parent wants to guarantee their children security and stability, whatever life throws at them. With this in mind, life insurance and foundations such as the Fondation de Secours Mutuels aux Orphelins (FSMO) in Switzerland are options worth considering. Our article compares these two solutions to help you make an informed choice and protect those who matter most: your children.

Objectives and operation

The purpose of life insurance is to provide financial protection for designated beneficiaries in the event of the insured's death. Life insurance contracts are marketed by for-profit insurance companies, aiming to generate profits while offering quality benefits.

FSMO, on the other hand, is a non-profit foundation. Its aim is to help children affected by the loss or disability of a parent, without seeking to make a profit. Founded before the advent of modern life insurance, it is now positioned as a complement to traditional insurance, tailoring its benefits to the specific needs of its beneficiaries.

Membership conditions

  • Age: Generally between 18 and 75.
  • Health: Health questionnaire or medical examination required.
  • Membership fee: Payment of a monthly membership fee.
  • Duration: Choice of coverage duration (10, 20, 30 years, etc.).
  • Age: Under 65.
  • Health: Declaration of good health without in-depth medical examination.
  • Residence: Living and working in Switzerland, or having your employer's head office based in Switzerland.
  • Children: All children are covered up to age 20. In the event of a parent's death or disability, children can receive financial benefits up to age 25 if they are still in school (up to age 20 otherwise).

Benefits in the event of misfortune

  • Death benefit: Payment of a single lump sum to beneficiaries.

Benefit payments: Financial assistance to enable the surviving or disabled parent to look after the children, pay childcare costs, or provide a good vocational training for teenagers.

Flexibility of use: Benefits can be used according to the needs of the surviving parent, whether to cover living costs, education or extracurricular activities.

Membership costs

The cost of life insurance varies considerably according to a number of factors, including age, state of health (e.g., much higher premiums for smokers), the amount of coverage and the duration of the contract. On average, life insurance premiums can range from CHF 20 to over CHF 100 per month, depending on the coverage chosen and the insured's personal criteria.

FSMO contributions are structured differently. Depending on the desired level of coverage, annual contributions vary. For example, for a 30-year-old adult, contributions can start at around CHF 150 per year for basic coverage. These amounts are used not only to guarantee financial assistance in the event of death or disability, but also to support other families in need, by adhering to the principle of mutuality.

FSMO benefits and contributions table

Tax deductibility

Life insurance premiums may be tax-deductible, depending on current legislation.

Contributions are also tax-deductible, according to the specific terms of the canton of residence.

Use of contributions

If the insured event does not occur during the term of the contract, the premiums paid are generally not refunded. The money stays with the insurer, except in cases where the contract provides for a cash surrender value.

Contributions stop at age 20 for all children. In the event of a parent's death or disability, beneficiary children can receive financial benefits up to age 25 if they are still in school (up to age 20 otherwise). In the absence of misfortune, contributions are used to help other families in need, according to the principle of mutuality.

Choosing between life insurance and FSMO depends on the needs and values of each family. Life insurance offers personalized and flexible financial coverage, often necessary to complete a global protection plan. FSMO, with its supportive, not-for-profit approach, offers tailored, human support, in keeping with a tradition of mutuality and solidarity. By combining the two, you can maximize your children's financial security and well-being in the event of a hard blow, while participating in a community of mutual aid. Make the choice that best suits your situation and your values, to best protect your loved ones. 

To find out more about FSMO, we invite you to read our article article on our blog.

Fondation de Secours Mutuels aux Orphelins
Chemin Malombré 5
1206 Genève
T. +41 (0) 22 830 00 50
Instagram: @fsmo.geneve