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Our daughter was born last month. What is the best way to insure her against disability? Should we get her covered with occupational disability insurance or capital insurance for accidents or illness? Or maybe a combination of both?
Greetings,
Disability insurance for children (like that offered by health insurance providers and other insurance companies) should cover more than just accidents.
Disability insurance which covers accidents alone may be cheaper, but disabilities resulting from illnesses are statistically proven to be more common. In Switzerland, single-benefit disability insurance (known as "Kapitalversicherung" in German) is often taken out by parents for their children as a means of insuring against the financial consequences of a child becoming disabled. If you child becomes disabled, this type of insurance pays out a large benefit which you can use to invest in your child's future care.
Insurers which offer this disability insurance include Visana, Swica, KPT, Mobiliar, Concordia, Helsana, Sympany (important: 2-year qualification period applies), ÖKK, Sanitas and more. Always check whether or not a policy has a qualification period between the time you take out insurance and the time at which insurance coverage actually begins.
Income protection insurance for children pays out a regular pension rather than a single large benefit if the child becomes disabled. This pension can help cover ongoing costs. Premiums for income protection insurance are notably higher than those for single-benefit disability insurance, but the child receives an income for the rest of their life. This insurance is offered by Swiss insurer Mobiliar among others.
It is possible to combine both types of insurance (single-benefit and pension), but only by using two separate products. Whether or not insuring your children this way is worth it depends on your financial situation and your level of concern about the risk of disability.
Best regards from Moneyguru
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