The 3rd pillar bank deposit is a private pension account that is blocked under certain conditions. This plan offers more flexibility regarding contributions as well as a low administrative fee because it does not include any insurance benefits. In the event of an early withdrawal (before the age of retirement) to repay a mortgage with an extraordinary amortisation, you can benefit from all of your personal capital. Different from insurance, you are not penalised with a surrender value (insurance and administrative costs deducted from contributions).

The 3rd pillar bank deposit is recommended whenever you have a relatively substantial income and/or wealth at your disposal, because in the case of death or disability, the mortgage will still have to be repaid either by the surviving spouse, heirs, or the disabled person.

To make up for a lack of insurance coverage, you can take out a death risk only insurance with an additional disability pension. This pension should correspond to the 3rd pillar bank deposit contribution plus tax on the income earned from this pension in case of payment (taking into account your marginal tax rate ). This pension will represent exemption from the payment of endowment insurance premiums.

Finally, while this solution is financially more interesting, it also requires more funds. It offers the advantageous possibility of staggered withdrawals, which reduce tax progression. It is also profitable to link your life insurance solution for your personal capital to that of your bank account.  All in all, this solution provides flexibility, security and return. However, this information depends on your age and state of health.

MORTGAGE SIMULATOR 

Articles on amortisation / life insurance

• Direct amortisation
• Indirect amortisation
• Indirect or direct amortisation ?
• 3rd pillar insurance
• Linked 3rd pillar A
• Private 3rd pillar B
• Whole life insurance
• When rates are low, should we amortise more?