The summer holidays are here: we can finally take a break from everyday life and head out to enjoy outdoor adventures. But what if you have an accident while cycling or kayaking that stops you returning to work after your holiday? How would you maintain your standard of living and continue to look after your loved ones? Find out more about how to protect yourself financially against accidents here.
Do you have accident insurance completely in place before the holidays or are there gaps? There are a few things to take into consideration when it comes this. First of all, a lot depends on your employment situation. Secondly, the severity of the accident determines its consequences. Will you return to work in a few weeks or months, or will you remain permanently unable to work? And in the worst case, death following an accident, you should be prepared so your surviving family is provided for.
What your earnings situation has to do with accident insurance
Employees who work more than eight hours a week at the same company are automatically insured against non-occupational accidents through this company. Self-employed individuals, however, must take out this insurance themselves. A voluntary accident and daily sickness allowance insurance policy and a pension for loss of earning capacity make sense here. If the consequences of an accident lead to the individual’s ability to work being permanently compromised and therefore to a disability, then the affected individual will receive an IV pension from the first pillar. If the affected individual was employed by a company, then they are entitled to another pension from the second pillar (UVG) in addition to the IV pension. Together, both pensions protect your usual standard of living up to 90% of the statutory retirement age (AHV) pension, a maximum of CHF 133,380 (as of 2022).
Inability to work after an accident: an example
Stefanie, 31-year-old mother to a four-year-old daughter, is actually very safety-conscious during her trail adventures. But – on the footpath to her favourite route, of all places – she slips on the muddy ground. She is unlucky and tears a ligament in her leg. She is absent from her job as a sales representative for six weeks. Because she works full time, her compulsory accident insurance cover will continue to pay out 80% of her current income from the third day after the accident up to a duration of 720 days or 730 days, depending on the insurance solution. This leaves a gap of only 20%, up to the income limit of CHF 148,200 (as of 2022), and this can be bridged with a private accident daily allowance insurance policy.
Benefits for disability as a result of an accident
The financial consequences of loss of earning capacity are especially drastic for sole proprietors. Sole proprietors do not have a pension under the second pillar (UVG), meaning they only receive benefits from disability insurance under the first pillar (a maximum of CHF 28,680 in the event of total disability). If an accident renders you permanently unable to work, first pillar disability insurance will pay you a pension. Your children will receive 40% of your main pension from there as a child pension.
Employees are also paid out a pension under their accident insurance. This will see you continue to receive up to 90% of your previous salary. No matter your employment situation, it is worth reviewing income protection insurance for you and your family if required in the third pillar. This additional cover is almost indispensable for sole traders since the benefits under state disability insurance are almost never enough.
Benefits in the event of death
- Benefits under the first pillar: In the event of your death, your surviving dependants will receive an orphan’s or widower’s pension from your old age and survivors’ insurance. However this requires there to be minor children from the partnership or marriage. The widower’s pension will pay out until the last child together reaches legal age. An orphan’s pension will pay out until the child reaches legal age or until they have completed their initial education, up to the age of 25.
- Benefits under the second pillar: If you have accident insurance through your employer, then this accident insurance will pay out a pension, too (UVG). Correspondingly, the same explanations regarding benefits under the first pillar apply: surviving dependents may potentially receive another pension from the pension fund, covering up to 90% of your income. Affordability can quickly become a problem where you have any mortgages still to be paid off. Additional death benefits insurance can help you to bridge this gap.
Who will get my pension assets?
The rule regarding who will inherit the pension assets you have accrued depends on the circumstances.
Pension funds:
Pension funds set their own inheritance rules for this.
Assets in the second pillar and vested benefits accounts:
If you have assets in the second pillar or in vested benefits accounts, under statutory regulations these generally go to your spouse or partner from a registered relationship, and to your children under the age of 18 or 25, if they are still in continuing education. These are followed by individuals that have supported you financially over the last five years, with whom you have lived in a domestic partnership during that time or whose mutual children you have an obligation to support. These are followed by full-aged children or any other legal heirs.
Pillar 3a pension assets:
Last but not least, you may also potentially have a savings balance in the pillar 3a. This goes to the following persons in this order:
- your surviving spouse or surviving registered partner;
- the direct descendants and the persons for whose maintenance the deceased has made a considerable contribution, or the person who has lived with the deceased in the same household without interruption for the last five years prior to his/her death, or who is responsible for the maintenance of one or more mutual children
- the parents
- the siblings
- the other heirs
Note:
Sections 1, 2: order cannot be changed
Sections 3,4 and 5: order can be changed
Gain an overview with our pension analysis
How can an accident while on holiday or at home impact your family living situation? Our pension analysis can provide the answer to this question. Based on your family budget, we show you how well protected you are financially against loss of earning capacity or disability as a result of an accident and in the event of death. The following risks are assessed:
- Loss of earnings: Would your family be financially protected if you were to lose all or part of the family income for an extended period due to an accident?
- Disability: Would the benefits provided by social insurance be sufficient to secure your standard of living if you were to become permanently unable to work after an accident?
- Death: Would your surviving dependents be provided for if you were to die as a result of an accident?
Generali tip: How well protected are you and your loved ones? Our pension calculator can provide you with the answer in less than five minutes. With just a few clicks, you can find out whether your family would be protected from financial difficulty if you were to become permanently unable to work or to die as a result of an accident.
