Daily sickness benefits & daily sickness benefits insurance in Switzerland

1. What is daily sickness benefits insurance?

After the probationary period (max. 3 months) and with the exception of short temporary employment contracts, employers are obliged to continue paying wages in the event of illness. They can voluntarily offer you more than the legal minimum as a replacement for the statutory protection for continued payment of wages as defined in the Swiss Code of Obligations.

The statutory obligation to continue paying wages depends on the place of work and the length of service. In extreme cases, the employer can stop paying wages after just three weeks. The period is determined using the Basel, Bern or Zurich scale (in German, French and Italian only).

In contrast, collective sickness benefits insurance replaces the loss of wages through incapacity for work due to illness or pregnancy for a maximum of two years from the start of the incapacity. Usually, 80% of the wage is paid for 720 days within 900 consecutive days. The employer will cover at least half the premium for this insurance. However, the statutory obligation to continue paying wages starts from the first day of illness and amounts to 100% of the wage. With daily sickness benefits insurance, a waiting period of up to three days may apply. This means that you will not receive any salary for these days unless your employer pays it voluntarily.

2. Who needs daily sickness benefits insurance?

Employees without collective insurance, self-employed persons and stay-at-home parents could suffer financially in the event of illness. You can insure any potential short-term loss of wages yourself by voluntarily taking out individual daily sickness benefits insurance.

Note: if your employer has collective daily sickness benefits insurance and your contract ends, you can (unless otherwise stated in the contract) switch to individual daily sickness benefits insurance within 30 days without a health check. Although this is more expensive, it can still be worth doing. This might be useful, for example, if you do not have a new job or your new employer does not have collective insurance.

There are special daily sickness benefits insurance policies to cover stay-at-home parents. But beware: some products will only pay benefits for one year. Although this won't cost too much, should you become unable to work through disability, the necessary social security checks often take much longer and a pension won't be paid until after two years (720 days). This can lead to a financial shortfall.

Individual daily sickness benefits insurance is not to be confused with income protection insurance. In the event of disability, this complements the pension benefits received from the 1st and 2nd pillars in the long term.

3. Daily sickness benefits insurance for self-employed persons and stay-at-home parents

In the event of incapacity for work following an accident, employees automatically receive daily accident benefits as defined in the Accident Insurance Act. Even if your employer has not taken out daily sickness benefits insurance, you will therefore still receive 80% of your salary following an accident from the third day of incapacity for work until recovery or the beginning of pension payments. You therefore do not have to include the risk of accident in your individual daily sickness benefits insurance.

This is different for self-employed people and stay-at-home parents. They must ensure that their daily benefits insurance pays out both in the event of illness and in the event of an accident. You can choose daily benefits insurance on the basis of the Insurance Policies Act (VVG/LCA) or on the basis of the Health Insurance Act (KVG/LAMal). However, the latter is becoming less important (see below). Alternatively, there are collective insurance solutions for certain professions.

In contrast to employees with a set wage, self-employed people may also have a problem with proof of earnings because of their fluctuating income. This also applies to young entrepreneurs, many of whom only pay themselves a symbolic salary during the start-up phase of a business. Stay-at-home parents, however, do not actually suffer a loss of earnings as such. Fixed-benefit insurance can be useful in these cases. With this type of insurance, instead of a monthly wage, you insure a fixed sum that is defined in advance. This must be paid out to you by the insurance company in the event of a claim.

In all cases, you can save money by extending the waiting period (e.g. to 60 or 90 days). The longer you wait for the payout, the lower the premium will be.

4. Who offers daily sickness benefits insurance?

Both health insurers and private insurance companies offer daily sickness benefit insurance for companies and individuals. There are two different variants: daily benefits insurance defined by the Insurance Policies Act (VVG/LCA) and that defined by Health Insurance Act (KVG/LAMal).

Daily sickness benefits as governed by the Insurance Policies Act (VVG/LCA)

Daily sickness benefit insurance in accordance with the Insurance Policies Act (VVG/LCA) is now common in Switzerland for companies as well as for individuals. The insurers can reject applications for insurance (freedom of contract). In addition, they can set the premiums based on age, gender, state of health and other criteria.

Women should definitely pay attention when choosing a product: some insurers charge a higher premium for insuring incapacity for work due to pregnancy and childbirth.

Daily sickness benefits as governed by the Health Insurance Act (KVG/LAMal)

Daily benefits insurance according to the Health Insurance Act (KVG/LAMal) is also available as collective and individual insurance. Providers are obliged to accept all applicants. Health insurers are obliged to accept anyone wishing to purchase daily benefits insurance as defined by the Health Insurance Act (KVG/LAMal). However, you do have to fill in a health questionnaire for your application to be approved. The provider may apply exclusions for pre-existing conditions for a maximum of five years.

Other characteristics of daily sickness benefits insurance according to KVG/LAMal: men and women pay the same premiums. Loss of salary due to maternity is covered as long as insurance is taken out at least 270 days before birth.

However, daily benefits insurance according to KVG/LAMal has become much less significant. In particular, the providers no longer conclude new collective agreements pursuant to KVG/LAMal nor do they convert existing agreements.

In the case of individual insurance, the limits for daily benefits are now often so low (10 to 30 francs) that they are no longer suitable for replacing an income.

5. How much does daily benefits insurance cost?

The premiums of daily sickness benefits insurance are based on the insured salary or loss amount, as well as the industry, place of residence, risks, age, gender and the waiting period. The price can range from a few dozen to several hundred francs per month.