We are expecting our first child in March. In this context, I am currently researching various financial and insurance topics. One point that is mentioned time and again, but I couldn’t find much information about it online, is that you should take out a “child disability pension”.
The background to this is that children who become disabled as a result of illness or accident only receive the minimum IV benefits for life, which corresponds to the minimum subsistence level. This is because kids do not have an employer and are therefore not insured through the pension fund.
I looked at various insurance providers (Mobiliar, Zurich, Pax) but could not find exact pricing online. Also, a savings component is often included, which is of course overpriced and unnecessary.
What are your thoughts on this? Have you taken out such insurance, if so, what pension amount? Can you recommend a product?
The market seems to be quite intransparent (as usual) if you do not go for a relative simple insurance solution that pays out a capital sum if event X (death, disability through illness or accident) is chosen.
Since we are on the FIRE road and should amass some capital which will be passed on, the kid will get IV + whatever the SWR is from the herited capital.
Worst case means to reach the FIRE goal a bit later - I would not take an extra insurance for this though.
I agree that building up capital as part of a FIRE-strategy is sensible (although achieving FIRE with kids in Switzerland with a regular income is not easy to achieve).
However, as I understand it, you have to take into consideration that the (disabled) child will only receive an IV pension once it’s turned 18. Before that, the IV’s benefits are very limited, so it’s basically the parents that will have to fund any kind of additional costs inbetween (which can amount to a lot). And even if you get to the age of 18, the IVs payouts are not that generous.
So addressing this risk for children between 0-18 makes in my view makes sense also with a view to a negative impact this could have on a FIRE strategy. But of course, the insurance solution has to be cost-effective as well.
But that’s what I gather with my limited knowledge/experience in this field.
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, tu confirmes avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/
Durch das Lesen und die Teilnahme an diesem Forum bestätigst du, dass du den auf http://www.mustachianpost.com/de/ dargestellten Haftungsausschluss gelesen hast und damit einverstanden bist.