Multi-year contract

What is a multi-year contract?

A multi-year contract is an insurance contract that is concluded not for one year but for a fixed period of several years. In health insurance, this only concerns supplementary insurance, such as supplementary hospital, dental or outpatient insurance. The exact term is stated in your policy.

Supplementary insurance policies are private contracts under the Federal Act on Insurance Contracts, the Insurance Contract Act (ICA). The insurer may agree the term with you, but must inform you about the term and how the contract ends before you sign. If the contract contains a renewal clause, it is tacitly renewed after the fixed term if nobody cancels it, each time for no more than one year.

There are no multi-year contracts in basic health insurance. There, you can switch insurer every year: after you receive notice of the new premium, with one month’s notice to the end of the year, and with the standard deductible and no special model also to the middle of the year. A multi-year contract in supplementary insurance therefore never ties you to the same insurer’s basic health insurance. You can switch basic health insurance and keep your supplementary insurance.

Since the revised ICA came into force on 01.01.2022, long commitments have been heavily restricted. You can cancel any contract after three years, even if it was concluded for five or ten years.

How it works

These rules apply to a multi-year contract:

Notice must be given in writing or in another form that allows proof by text. The end of the “year” depends on when the contract began: if your contract began on 01.01., the third year ends on 31.12. of the third calendar year. If it began on 01.04., it ends on 31.03.

One special feature of supplementary health insurance: the right of ordinary cancellation and the right to cancel after a claim belong only to you, not to the insurer. So the insurer cannot simply get rid of you after three years or after expensive treatment. For you, this means: you can cancel, but as a rule the insurer cannot.

Legal basis

The key provision is Art. 35a of the Federal Act on Insurance Contracts (ICA). Under para. 1, the contract can be cancelled with effect from the end of the third or any following year, giving three months’ notice, even if it was agreed for a longer period. Notice must be given in writing or in another form that allows proof by text. Para. 2 allows the contract to be cancelled even earlier if both parties agree. Para. 4 states that in supplementary insurance to social health insurance, the right of ordinary cancellation and the right to cancel after a claim belong only to the policyholder.

Art. 35b ICA allows cancellation for good cause at any time, for example if, in good faith, you can no longer reasonably be expected to continue the contract. Art. 47 ICA declares a tacit renewal void to the extent that it is meant to apply for more than one year at a time. Art. 103a ICA applies the cancellation rights of Art. 35a and 35b to contracts concluded before 01.01.2022 as well. The duty to inform about the term and the end of the contract is set out in Art. 3 para. 1 let. d ICA, and the 14-day right of revocation in Art. 2a ICA. In basic health insurance, switching is governed by Art. 7 of the Federal Health Insurance Act (KVG); there is no minimum term there.

Example: cancelling a five-year contract

Marco, 38, took out supplementary hospital insurance on 01.01.2024 with a fixed term of five years, i.e. until 31.12.2028. In autumn 2026, he wants to cancel because he has found a different offer.

What this means for you

Before signing, read the term in the quote and in the general terms and conditions of insurance. A multi-year contract ties you for no more than three years, even if it runs longer. Ask whether a term discount will be reclaimed if you cancel early.

If you want to switch supplementary insurance, proceed in this order:

1. Work out the cancellation date: look up when your contract began, calculate the end of the third or a later year and count back three months.
2. Secure the new insurance: submit your application, answer the health questions truthfully and wait for acceptance.
3. Cancel: in writing, on time, with proof. Details are set out under cancelling supplementary insurance.

Different rules apply to basic health insurance: there, you switch without health questions, and the notice period after you receive notice of the new premium ends on 30 November. You will find all dates under deadlines and an overview of insurers under health insurers. The cancellation letter gives you a template for your notice.

Common mistakes

• Cancelling first, then taking out new insurance. If the new insurer refuses you, you are left without supplementary insurance.
• Calculating the deadline wrongly. What counts is the contract year, which is not always the calendar year, and the notice must reach the insurer three months beforehand.
• Believing an old contract ties you for ten years. Contracts from before 2022 can also be cancelled after three years.
• Confusing basic and supplementary insurance. You can switch basic health insurance every year, regardless of a multi-year contract in supplementary insurance.
• Overlooking the term discount. Depending on the contract, early cancellation can lead to a claim for repayment.