Pillar 3b is unrestricted private provision: what you put aside without the rules of pillar 3a. The Federal Social Insurance Office describes it as personal saving — cash, savings accounts, life insurance, investments — which you can use freely at any time, and for which there is no tax deduction.
That is true at federal level. In Geneva the answer is more nuanced, and it plays out in three different taxes: income, wealth and inheritance.
A cantonal deduction exists, but it is small and shared
The Geneva law on the taxation of individuals allows a deduction for "life insurance premiums and interest earned on savings capital", within a single ceiling. The two therefore share the same cap: what your savings accounts earn reduces the room left for your life insurance premiums.
For the 2026 tax year, the implementing regulation sets that ceiling at 3'528 francs for spouses living in the same household and 2'352 francs for a single person, plus 962 francs per dependant. The Council of State re-indexes these amounts every year, so a figure without its year means nothing.
The limit is doubled where neither spouse belongs to an occupational pension institution or a tied private provision scheme, and raised by half as much again where only one of them does. That is the logic of the system: the deduction partly offsets the absence of a second pillar and a 3a, it does not reward pillar 3b as such.
The surrender value counts as taxable wealth
The LIPP expressly makes "life and old-age insurance policies, at their surrender value" subject to wealth tax. A redeemable 3b policy is therefore, every year, an item of taxable wealth in Geneva, just like a bank account.
Pillar 3a escapes that logic as long as the benefit is not due: the federal law on occupational pensions exempts claims against pension institutions and recognised forms of provision from direct taxes before they fall due. For a Geneva taxpayer, that is one of the most concrete differences between the two pillars.
Geneva does, on the other hand, have an overall cap: wealth tax and income tax together, including the additional cantonal and communal centimes, may not exceed 60 per cent of net taxable income, with the net yield of wealth set for this calculation at no less than 1 per cent of net wealth. This is the "tax shield", and it bites precisely where substantial wealth produces little income.
When the money is paid out
Payments from redeemable private capital insurance are in principle exempt from income tax, under federal law as under the LIPP, which repeats the rule word for word.
The reservation concerns contracts funded by a single premium. The benefit is then exempt only if it serves provision, which the law defines precisely: paid to an insured person who has reached the age of 60, under a contract that has run for at least five years and was concluded before their 66th birthday. Failing that, the return component is taxed as income.
On death, inheritance duty decides
Geneva is a canton where the surviving spouse and relatives in the direct line are exempt from inheritance duty, except where the deceased was taxed according to expenditure. People often conclude from this, a little too quickly, that a life insurance policy costs nothing on death.
The Geneva law on registration and inheritance duties is explicit, however: sums owed by the insurer, to the policyholder as well as to the beneficiaries, because of or on the occasion of the insured person's death, are subject to inheritance duty. The family relationship between the insured person and the named beneficiary therefore sets the rate. Two points matter: premiums the beneficiary paid out of their own funds are deducted from the insured sum, and the duty remains payable even if the beneficiary renounces the succession.
Civil law adds its own rule, this one federal. Death policies taken out in favour of a third party are added to the estate only at their surrender value calculated at the time of death, and it is at that value that they are subject to abatement where they eat into the heirs' statutory shares.
What to keep in mind before signing
- The Geneva deduction exists, but it is modest and your savings interest already uses it up; it only doubles if you have neither a second pillar nor a 3a.
- The surrender value will be part of your taxable wealth every year, which is not the case with a 3a.
- For single-premium contracts, whether the capital paid out is exempt depends on three conditions of age and duration set by law.
- On death, the beneficiary clause does not put the benefit outside Geneva inheritance duty: it sets the rate.
This page describes rules, not your situation. The cantonal amounts change every year and your rate depends on your income, your wealth and your commune; for a real case, the cantonal tax administration and a tax adviser are the people to ask.