It's important to us to explain the complex topic of the occupational benefit scheme as comprehensibly as possible. However, sometimes we cannot get around using technical terms. In our glossary we explain these technical terms briefly and in a reader-friendly manner.
Defined contribution scheme
A model for providing benefits for an occupational pension plan. The insurance benefits are provided on the basis of the retirement savings accumulated by the individual (interest-earning amount).
Defined premium method/contribution plan
With this system, insured benefits are calculated according to tariffs on the basis of contributions paid. The contributions must be clearly defined, for instance as a percentage of an insured salary or, less frequently, in francs.
Degree of disability
A percentage that indicates the extent to which the insured person's disability limits his or her earning capacity. The degree of disability is decisive in assessing the IV pension due.
Insurance benefit in the form of a one-time lump-sum payment. Paid in the event that a person becomes disabled.
As laid down in the regulations of life insurance companies, an insured person is considered to be permanently or temporarily disabled when, owing to illness, accident or disablement, he is no longer able to exercise his customary occupation or to perform other suitable work which he could be reasonably expected to carry out. Work is considered to be suitable when it corresponds to the insured person's abilities and skills as well as his previous social situation. In the context of disability insurance, the right to benefits depends on the existence or not of a loss of earnings resulting from the disability. For all persons exercising a lucrative activity, calculation of the degree of disability is based on actual loss of income. The insured person's earned income prior to the onset of the disability is compared with the income he would currently have - or could be expected to have - in the exercise of his former occupation or doing some other suitable work which he could be reasonably expected to carry out. The difference, expressed as a percentage of income, indicates the degree of disability. For persons not exercising a lucrative activity (e.g. housewives and adolescents), the degree of disability is measured by their inability to carry out certain tasks or the restricted nature of certain activities. Employed persons in particular should take care to ensure that, through the choice of a suitable waiting period, the legal or contractual duration of the employer's obligation to continue to pay his salary should be coordinated to end with the commencement of disability pension payments.
The notion of disability is normally assimilated with the idea of "incapacity to earn one's living". Strictly speaking, disability implies that a person's health is wholly or partially affected as a result of illness or an accident, so that it is not necessarily linked to an incapacity to earn. In the field of life insurance, a distinction is made between temporary and permanent disability. An insurance company must, therefore, only provide a benefit if, following an illness or accident, there is a reduction in income resulting from the illness or accident and if the insured person is incapable of exercising his occupation or some other activity corresponding to his social situation.