Eight out of ten cases of disability are due to illness. Continued salary payments and daily sickness benefits end after two years at the latest – the person is unable to work and receives money from the 1st pillar (IV) and 2nd pillar (BVG), provided a pension fund is available.
The benefits are calculated so the combined contributions of both pillars achieve around 60% of the previous income. However, the payouts can also be higher or lower: Coverage may be better with an above average pension fund solution. Conversely, if you are missing OASI contribution years or work part-time, the level of protection is often lower.
Those who work part-time are often doubly affected in the event of disability: The salary is already significantly lower due to the reduced working hours. In addition, the coordination deduction in the pension fund usually has a particularly strong impact. For this reason, only a small part of your salary is insured under the BVG. If you have multiple jobs with only few working hours each, you may not be insured through the pension fund at all because you do not meet the entry threshold at any of them.
In such situations, disability can become a burden, especially for families: If you are unable to work due to serious illness, you will no longer be able to take care of your children in the same way as you did before, often leading to the need for a costly external solution.
For this reason, parents who are not in gainful employment are also affected. Their parenting and care work is not only of great value for their children's development but also has a financial value that is often underestimated.
Teenagers and young adults – especially students – are another group with special insurance needs since they usually start work at a relatively low salary and have not yet paid much into the social insurance systems.
Ultimately, everyone who wants to maintain their existing standard of living needs protection. To ensure that even in the event of disability they can continue to live where they are, meet their financial obligations and pursue their hobbies and interests.
What would disability mean for you in concrete terms? What would it take to keep your household running as usual? How would you pay your current bills and mortgage?
If you want to close your pension gaps and maintain your standard of living even in the event of a long-term illness, you should take out private 3rd pillar insurance: Disability insurance allows you to close the gap between your previous income and the benefits from the 1st and 2nd pillars.
This protects you and your loved ones from financial gaps. You ensure that you and your family can continue to live in your familiar surroundings, pay the rent or mortgage and meet your obligations.
It is easy to take out disability insurance. You can calculate the premium for your desired insurance coverage online. It's often worthwhile to seek personal advice as the solutions are as individual as your circumstances. At Zurich it's up to you: We can advise you at home, at the agency or via video conference – whatever suits you best.
