Financial stability when it matters most. Security for your children and spouse.
How can I protect my children and spouse if anything happens to me? It's an important question that married couples must consider. Learn about the benefits paid by your pension in the event of disability, and how a widower's/widow's pension and survivors' pension guarantee financial stability for your family in the event of your death.
In legal terms, the marriage model provides the most protection
In good times and in bad: Spouses save for retirement as community property. They have a mutual conservatorship obligation and a mutual claim to inheritance. Nonetheless, whether newly married, just starting a family, or married for many years, couples should not put off their financial planning. If one partner becomes disabled or dies, it is important that the other can continue to cover the costs of living, such as the mortgage.
When does social insurance pay benefits?
Different insurance carriers are responsible, depending on whether it is a case of disability due to accident or illness, or death.
| Accidents and occupational illness | If you have an accident or job-related illness, the AHV (Federal Old Age and Survivors' Insurance) and accident insurance will pay benefits. You will receive a daily benefit from the accident insurance if you have a short-term disability. For long-term disability, the accident insurance and AHV will pay you a disability pension. In the event of your death, your spouse and children would receive a survivors' pension. |
| Illness | If you are unable to work temporarily due to illness, your employer must continue to pay your salary for a certain amount of time. If you are disabled for a longer period of time, the AHV and pension fund will pay benefits. You will receive a disability pension from both pillars. In the event of your death, your surviving spouse and children would receive a survivors' pension. |
Accident insurance
Employees are covered by the mandatory accident insurance. The employer pays the insurance premiums for occupational accidents and illnesses; as a rule, you are responsible for non-occupational accident premiums. Self-employed persons can obtain insurance coverage themselves.
Starting on the third day after the accident, the insured person will receive a daily benefit of 80 percent of their salary. If they will not be able to return to work, together with the first pillar they will receive a disability pension for 90 percent of the pensionable salary. These benefits will apply up to a salary of CHF 148,200.
If the insured dies due to an accident, their widow or widower will receive a survivors' pension in the amount of 40 percent of the pensionable salary. Children who have lost both parents receive a pension of 25 percent, while children who have lost one parent will receive 15 percent. The benefits will total no more than 70 percent for all survivors together.
Continuing salary payments during illness
Employers are obligated to pay 100 percent of their employees' salary for a certain amount of time in the event of illness. According to the Swiss Code of Obligations, the minimum period is three weeks in the first year of company service. After that, the time period depends on what is called the Bern, Basel, and Zurich scale. Many employers purchase daily benefits insurance in order to pay their employees 80 percent of their salary in the event of longer absences. At least half of the premium must be paid by the employer and the rest by the employee. See your employment regulations for specific details.
First pillar: AHV/IV benefits
Insured persons receive a disability pension in the event of long-term health problems
If you suffer from long-term physical, psychological, or mental disability problems due to an illness or accident and cannot perform your regular duties, you will receive a disability pension. Disability pensions are paid to persons who are not eligible for any employment on the job market.
The amount of benefits is calculated based on the insurance term and income. The degree of disability also determines the pension amount. For disability of 40 percent or more, the pension is one-fourth; for 70 percent or more disability, the insured receives a full pension.
Spouses and children receive a pension in the event of the insured's death
If the husband dies, his wife and children would receive a lifetime widow's pension from the first pillar (AHV). If there are no children, this applies only if the survivor is at least 45 years old and the couple was married for at least five years.
If the wife dies, the widower receives a pension only as long as there are dependent children under the age of 18. Children will receive an orphan's pension until the age of 18, or until 25 if they are in school.
There are differences for same-sex couples. If one husband in a male couple dies, the surviving husband does not receive a widower’s pension. If there are children, the surviving husband will receive a widower's pension for a limited period of time until the children reach the age of 18. The surviving wife of a female couple receives a widow’s pension with no time limit if there are children. In the absence of a child, female couples are subject to the same rules as straight couples: they must be older than 45 and married for at least five years, with any registered partnerships counting toward this requirement.
Second pillar: Benefits from the pension fund
Pension funds pay a disability pension for insureds and their children
If you are unable to work due to illness and receive a disability pension from the first pillar, you will also receive a disability pension from the pension fund. The amount depends on your pension fund's pension plan. See your pension certificate for details. Benefits will also be paid to children with a disabled person's child's pension. As a rule, this is 20 percent of the disability pension.
Spouses and children receive financial benefits in the event of the insured's death
In the event of death due to illness, under the second pillar the insured's spouse will receive a survivors' pension or single lump-sum payment from the pension fund. The insured's own children will receive an orphan's pension. For details on the second pillar, see your pension fund statement and regulations.
Third pillar: Private pension provision benefits
Spouses are entitled to the retirement savings of the insured
The private pension is not only very suitable for retirement but also for setting aside capital for the worst-case scenario. In the event of the insured's death, the spouse is entitled to the retirement savings according to the order of beneficiaries.
Other types of insurance
If you wish to provide additional financial security to your spouse and children, you can obtain a third pillar from your insurance provider. You can combine retirement savings with a disability and/or life insurance policy. But beware: A portion of your payment will be used to finance insurance coverage, and will not be available upon retirement. As an alternative, you can set up a retirement savings plan with a bank and conclude a separate risk policy with an insurance company.
Disability insurance guarantees financial stability
If you become disabled as a result of accident or illness, disability insurance will ensure that your family can maintain its usual standard of living. The disability pension closes the income gap between the federal and employee benefits insurance (second pillar) disability benefits and the actual costs of living, which tend to be higher.
Term life insurance provides additional coverage for spouses and children
In the event of your death, beneficiaries will receive a pre-determined lump sum or pension immediately. You are free to choose your beneficiary with Pillar 3b. Of course, you can select a family member but also a business partner. Term life insurance is very advisable if you are paying a mortgage on your home. This helps you ensure that your spouse and children can continue to reside there.
