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Does getting private income loss insurance in Switzerland make sense? From what I understand, both social security and my pension fund have insurance for income loss from disability. And there is also the government unemployment insurance. I am 30 years old and have worked in Switzerland for 3 years. Do I need extra income loss insurance?
Hi there,
The disability insurance which you receive from Swiss social security and 2a occupational pension funds is based on the contributions you make, so it is not a true insurance in that it does not guarantee a specific benefit.
If you have only contributed to social security and a pension fund for a relatively short amount of time, the disability pension you receive if you become disabled and cannot earn a living can be very low. On the other hand, if you have been contributing for several decades, your coverage may be adequate.
Young adults and people who have only worked in Switzerland for a short amount of time are the most vulnerable, because they have not yet contributed a lot of money to social security and their pension fund. Loss of income insurance can help to fill the gap in these cases, insuring that you continue to receive an income similar to your current income if you become disabled before you build substantial social security and pension savings.
Before taking out additional loss of income insurance, check the terms and conditions of your pension fund to find out what insurance coverage you already have. Some pension funds provide members with additional disability insurance above what is legally required.
Inquiring about the state of your disability insurance at both your pension fund and local social security office will give you a good idea of how much insurance coverage you already have, so you can make an informed decision about how much additional coverage you might need.
Best regards from Moneyguru
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