Disability Insurance

Hello :wave:

I’m not a fan of combined 3a insurance, luckily I don’t have any.

As I understand it, however, it would cover one or all of the following points:

  • Lump-sum death benefit for dependants (“Todesfallkapital”)
  • Premium waiver in the event of disability (“Prämienbefreiung”)
  • Income in the event of disability (“Erwerbsunfähigkeitsversicherung”)

I have decided for myself that I don’t need “Todesfallkapital” or “Prämienbefreiung” insurance because I don’t have a wife, children, house or other persons who are dependent on me.

But I’m wondering whether I should take out disability insurance. Independent without 3a, of course. However, I find it difficult to find online quotes because most insurance companies want to talk to you with an advisor. But before that, I want to think about the subject myself and get as much information as possible.

The following questions arise:

  • How much should the insurance pay out per month in the event of disability: Do I understand correctly that I add the insurance benefit from pillar 1 and 2 and then simply insure the rest?
  • It seems that many such insurance policies also have a term until retirement. Is this normal?
  • And last but not least: do you have any specific recommendations?

Best,
Markus

First, I would check out what 2nd pillar + IV would give, and then see if you really need it (the 2nd pillar can be widely different from contract to contract).

Yes, because than AHV and the normal pension would kick in.

I cannot recommend any special insurance company on that topic, since I determined that my 2nd pillar + IV should be enough.

I had it calculated a while back with AXA. IIRC for a monthly disability pension of CHF 2’500 (30k per year), I would have paid something like CHF 1000-1200, can’t remember exactly. Note that this is the insurance cost for a 39-year-old non-smoker with an office job, no risky hobbies and a normal BMI. It would go up the older you get.

Also remember that, apart from being unlikely, most disabilities are:

  1. not total, so you might only be 50% disabled and might still be able to work, and would only get a reduced disability pension, and
  2. temporary (e.g. burn-out/depression) and “over” after 2 years, which is the wait period before these insurances (and IV) start paying a disability pension.

I second this. Many pillar 2 pension plans already include supplemental disability insurance which insures all or most of your salary. When that is the case, the premiums are deducted from your salary along with your pension fund contributions, so you are already paying for it out of your own pocket. The advantage is that the premiums are often a bit lower than individual insurance since it is a collective policy.

Private insurance (pillar 3a or 3b) is only worth considering if your employer’s pension plan doesn’t include supplemental disability insurance that insures your full salary. That may also be the case if only a portion of your salary is covered by your pillar 2 pension plan (e.g. you earn a high income).

DI (IV) is kind of a last resort. Unless you’ve contributed to the AHV/IV for decades, your disability pension will be a bad joke unless you qualify for supplemental benefits (e.g. you have little income or wealth and will remain in Switzerland).

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If you actually think about getting a life insurance, then why not include disability risk? If you have people that depend on you, it can literally be the same (or even worse) outcome financially if a disability occurs as if you would die. Or am I missing something?

well that’s a good question. I haven’t given it enough thought. Essentially it’s because I am lazy. Dead or not is unambiguous. But disable is a ambiguous concept to me. Does unable to work qualifies? Does lose a leg but still can work qualifies? Losing a toe? Hearing function drops? And is the concept the same across all insurance companies?

I guess, I hope, it’s a well established concept and is standard among all insurance company. But basically I am just avoid spending time on learning the concept.

But since we are already on this topic, could you maybe shed some light?

In my understanding, it will be the doctor mandate by the insurance that will Qualify your % of disability.
If you have a bike accident broke a vertebrae on the make and can only move tong or eyes they may state you are 80% disable.
You will get 80% of the invalidity mentioned in your contract or 2nd pillar. I’m not sure if a private disability insurance will be summed to your 2nd pilar invalidity or only contribute to the difference.

Anyone has experienced a real invalidity compensation?

It’s complicated and expensive. As someone who doesn’t do well with mental load (and left a 4 figure claim to avoid the insurance claim hassle), I decided it was not for me.

Now I buy insurance for only extreme things: death, destruction of my house.

That’s exactly what I do now as well.

Most of the insurance policies discussed here pay out once. What do you think of disability insurance? So those that pay out e.g. 2k/month for a lifetime in the event of disability? The argument there is that the insurance benefit from AHV+BVG does not cover everything or could be too low.

Disability insurance is being discussed in this thread already.