Everything you need to know about insurance when you are self-employed

In Switzerland, one in four people are now self-employed, either as their main occupation or as a secondary activity, and the trend is set to continue. Becoming self-employed is above all a desire to be free, to be your own boss and to be able to manage your working hours as you see fit. Seen like that, it seems to have nothing but advantages. However, this status also entails many responsibilities, both financial and professional. Above all, a self-employed person needs to know exactly what the consequences are in terms of social insurance, otherwise there could be unpleasant surprises.

Firstly, they need to ensure that they have an adequate pension, because unlike an employee, they are no longer obliged to contribute to the 2^nd pillar (LPP/BVG) occupational benefits scheme.

Secondly, the self-employed rarely benefit from optimum protection to cover their needs in the event of incapacity for work due to illness or accident. Moreover, they are not subject to the law on accident insurance. Clearly, a self-employed person cannot count on any replacement income during a period of forced interruption of activity until a possible disability insurance (AI/IV) pension is granted. It is therefore essential to close this gap.

Take the case of Paul, aged 34, who has been a self-employed hairdresser and barber for five years. Let's imagine that he falls seriously ill and has to stop working to receive medical treatment.

If he is unable to work for several months and has taken the precaution of insuring an income of CHF 60,000, he will be entitled to a daily allowance of CHF 164.40. If not, he will only be able to rely on his own savings.

Take the case of Joséphine, aged 55, a self-employed osteopath for 20 years. Unfortunately, she breaks her leg in a skiing accident. If she has taken out optional LAA/UVG accident insurance, she will be able to receive a daily allowance for the duration of her incapacity for work. She will also be reimbursed for the cost of staying in hospital, rehabilitation sessions and medical appointments.

With accident insurance, there is no contribution to costs, so her medical expenses will be covered without taking into account the deductible or co-insurance.

Carole, 40, a freelance photographer for 15 years, has been told that she has multiple sclerosis and will have to stop working.

As she is not affiliated to the 2^nd pillar (LPP/LAA), she could receive a pension by first taking out a 3^rd pillar scheme in the form of life insurance.

This is essential additional cover, as it will supplement the AI/IV disability pension (1^st pillar), which is capped at CHF 2,450 per month in the best-case scenario.

Maxime, 24, a young freelance graphic designer for a few months now, finds it hard to imagine himself retired. However, when he sets up his own business after six years as an employee in a company, he no longer has to make compulsory contributions to his 2^nd pillar. He is therefore advised to take out a 3^rd  pillar (or adapt  this insurance), which will also enable him to be covered against the risks of disability and death as well as saving for his retirement. The icing on the cake is that it also offers tax benefits.

It should also be noted that the savings process is secure in the event of disability due to illness or accident. In the unlikely event of this happening, the insurer will take over payment of his savings until he is 65.