How to sufficiently protect yourself

If you are unable to work because of an accident, the mandatory benefits you receive are generally sufficient. This is not the case with illness. In this case, you could lose 40% or more of your income or, in the worst-case scenario, even all of it for as long as two years. This is why you need to check how good your compulsory insurance is in this kind of emergency situation and figure out what you need to supplement yourself.

Practical example: loss of earning capacity due to an accident

A momentary lapse in concentration on the slopes meant that Valerie, 29, single, suffered a fall. After she had been flown to hospital, it was revealed that she had been left with a complex knee injury, making Valerie part of the 7% of all people with a loss of earning capacity who are no longer able to work due to an accident. As Valerie is employed by a company and works an average of more than eight hours a week at the same firm, she is covered by compulsory accident insurance, regardless of whether her accident happened at work or, as in this case, it is classified as a non-occupational accident. As a result, she will receive 80% of her current income from the third day after the accident. The maximum insured annual income is CHF 148,200 (as of 2023).

When is it worth taking out daily allowance insurance?

If Valerie earned more than CHF 148,200 per year and her employer did not have any supplementary accident insurance, she could take out private daily allowance insurance with a health insurance provider or private insurer in advance. This would then compensate for the discrepancy between the insured income and actual salary in an emergency.

Longer absences have to be covered by supplementary insurance

If Valerie is unable to work for more than 720 days, she needs to take out additional insurance for a pension or a lump-sum payment, also from a health insurance provider or private insurer. In the event of loss of earning capacity as a result of an accident, money from the state and company pension schemes is usually sufficient to provide up to 90% of the affected individual’s AHV salary (with the maximum insured AHV salary being CHF 148,200). This will allow Valerie to maintain her standard of living. The situation is very different in the case of an illness.

Generali tip

Compulsory accident insurance only covers non-occupational accidents if employees work for at least eight hours for the same employer. If so, you can opt out of your health insurance provider’s “subsidiary accident cover” and save a couple of francs. If this not the case, you should take out private insurance.

Practical example: loss of earning capacity due to illness

Patrick, 34 years old, is married and has one child. Patrick works in the food industry and is his small family’s main wage-earner. During a routine appointment, Patrick’s doctor discovers a tumour in his abdomen. Patrick has to undergo radiation therapy and an operation; he is unable to work for an indefinite period of time. That makes him one of the approximately 80% of all those who become unable to work and lose their income as a result of illness. If his employer took out daily sickness allowance insurance for him, Patrick would receive a daily sickness allowance. How much, from which date and how long he will receive this is determined by his employer’s internal regulations or in the collective employment contract. 

If Patrick is not covered by any daily sickness allowance insurance, he receives his full salary for a period of at least three weeks and at maximum six months – sometimes even a little longer. This period depends on how long Patrick has been working for the company and in which canton it has its headquarters. After this period, Patrick’s employer may cease payment and Patrick himself must make up for the lost income And this will be for the entire period until he will become eligible for the state benefits from the Pillar 1 disability insurance. It can take up to two years after the illness is reported to receive these benefits.

You can find details about the various deadlines on the scale applicable for an employer’s continued salary payment obligation in the different regions. 

Illness is significantly less well covered than accidents

While Valerie is well covered after her accident, Patrick and his family will likely find themselves struggling to cope with financial problems due to his illness. When you fall ill, it is not uncommon to lose 40% or more of your salary. If neither Patrick nor his employer have taken out daily sickness allowance insurance, he may lose all of his income.

But why is this the case?

It is much more likely that you will become disabled as a result of illness, as opposed to an accident. This is why premiums are higher for illnesses. In the 1980s, the Swiss parliament decided to separate accident and health insurance because the costs no longer seemed reasonable for employers and employees. The law would probably also have failed a possible vote by a referendum. The two causes have thus been treated differently ever since.  

In the first months after an accident or falling ill, the causes determine how long the person concerned will receive benefits. For accidents, up to 80% of your income is covered. For illness, the continued salary payment obligation depends on the number of years of employment. It can cover anything of between three weeks and six months – or possibly even longer.