Skip to content
Introduction to Paymira: Register for the webinar
Book a demo

Better benefits for accident, sickness and pension

Mandatory social insurance provides basic cover, but it often leaves gaps. Supplementary UVG cover, daily sickness allowance insurance and extra-mandatory BVG help to cushion the financial risks. In this article, we show ways to get better benefits for accident, sickness and pension.

In our previous article, we looked closely at mandatory social insurance in Switzerland and gave an overview of how it works and its legal basis. It showed how important solid basic cover is for all employees, whether AHV (old-age and survivors’ insurance), IV (disability insurance) or mandatory accident insurance.

In many cases, though, it makes sense to go beyond this basic cover and close the gaps that higher incomes, particular needs or longer sickness absences can leave. This is where UVG supplementary insurance (UVG-Z), KTG (daily sickness allowance insurance) and extra-mandatory BVG (occupational pension) come in. In this article, we build on the previous one and show how these extended solutions give you and your employees broader protection, from better benefits after an accident or illness to more comfort in retirement, and how to combine the building blocks to fit your needs.

In Switzerland, employees are insured against sickness and accident in several ways. UVG-Z, KTG and the extra-mandatory part of BVG play a central role. All three contribute to the financial security of working people and their families. But their benefits, financing and legal basis differ considerably. Below is an overview of their background, how they work and what sets them apart.

In Switzerland, accident insurance for employees is mandatory under the Accident Insurance Act (UVG). Every employer must insure their employees against accidents at work (occupational accidents) and, for employees working at least eight hours a week, in their free time (non-occupational accidents). In addition to mandatory UVG cover, further benefits can be covered through UVG supplementary insurance (UVG-Z).

The financial consequences of illness, on the other hand, are covered by a daily sickness allowance (KTG), provided a contract is in place. Unlike UVG insurance, KTG is not generally required by law in Switzerland. It is, however, part of many collective labour agreements (GAV) and individual contracts, and often matters a great deal to employers and employees alike.

BVG, in turn, is the mandatory pension fund solution for employees above a certain minimum income. Alongside the statutory minimum benefits (mandatory BVG), there are extended levels that go beyond the minimum. These are known as extra-mandatory BVG. They allow companies or insured persons to agree better pension benefits, for example through higher savings contributions or better risk benefits (in case of disability or death).

2. UVG supplementary insurance (UVG-Z)

Mandatory accident insurance under UVG covers many risks comprehensively, but its benefits have limits. Daily allowances, disability pensions and certain treatment costs, for example, are capped under UVG. So anyone with a higher income, or who wants better cover for certain treatments, can take out UVG supplementary insurance.

This supplementary insurance is often offered by employers who want to give their employees a wider safety net. It can include, for example:

  • A higher insured salary: UVG pays in full only up to a certain salary ceiling (currently CHF 148,200 a year). Supplementary insurance can raise this limit, so that employees receive daily allowances or pensions closer to their actual salary after an accident.
  • Private or semi-private hospital cover: Mandatory accident insurance usually covers only the general ward in hospital, while UVG-Z can cover a stay in the private or semi-private ward. This gives insured persons more comfort and more choice of hospital.
  • Cover for special treatments: Depending on the policy, supplementary insurance can also include alternative treatments or further rehabilitation measures.

Depending on the agreement, the premiums for UVG supplementary insurance are paid by the employer, the employee or both together. Since it isn’t mandatory, there is some flexibility in how it is designed. Companies and insured persons should make sure, though, that the policy fits their own needs and risk profile.

3. Daily sickness allowance insurance (KTG)

Daily sickness allowance insurance protects employees from the financial consequences of lost salary when they can’t work because of illness. The Swiss Code of Obligations (OR) does require employers to keep paying the salary for a certain period (depending on years of service and cantonal court practice), known as the obligation to continue pay. But these periods are limited and often don’t last long enough in the case of longer illnesses.

A KTG policy steps in exactly when the employer’s continued pay runs out, or when the contract provides for the continued pay claim to be supplemented early by daily allowance insurance. The amount and duration of KTG benefits vary with the insurance contract. Many sectors and collective labour agreements use standard solutions that pay, for example, 80% of the insured salary for a maximum of 730 days (two years).

KTG premiums are usually split equally between employer and employee, unless the contract says otherwise. For companies, daily sickness allowance insurance cushions the financial risk of a long illness, while employees benefit from a longer period of secure income. What matters is that the waiting periods (the day from which the insurance pays) and the scope of cover are clearly set out, so that no gaps arise.

4. Extra-mandatory BVG solutions

BVG is the second pillar of the Swiss three-pillar system. Together with state provision (AHV/IV) and private provision (third pillar), it aims to maintain the accustomed standard of living as far as possible in old age, in case of disability or in the event of death. BVG sets a minimum salary (entry threshold) above which employees are insured on a mandatory basis. It also sets minimum benefits that every pension fund must provide.

Many companies, however, deliberately choose extra-mandatory BVG solutions to offer their employees more attractive pension benefits. In these extended plans, for example:

  • Higher savings contributions are paid, so that retirement assets grow faster.
  • Better risk benefits are agreed for disability or death, so that surviving dependants or those affected are better covered financially.
  • Salary above the upper BVG limit (CHF 90,720 a year, as of 2025) is also insured. A larger share of the actual income stays insured, and pensions turn out higher later on.

Extra-mandatory provision is particularly relevant for specialists and managers with higher incomes. Since the mandatory part of BVG is often not enough to maintain the accustomed standard of living in retirement, extra-mandatory solutions can close this gap or at least narrow it.

5. How the insurances work together and personal pension planning

UVG (including UVG-Z) deals mainly with accidents, while KTG steps in specifically for illness. Occupational pension, on the other hand, covers the long-term risks of old age, disability and death. For employees, and for the self-employed too, it is therefore essential to keep all three areas in view. Only by looking at accident, illness and retirement provision together can gaps in cover be avoided.

People with above-average incomes or particular needs (such as semi-private hospital cover after an accident, higher benefits in case of illness or a high retirement pension) in particular should check early whether the mandatory minimum insurance is enough. Companies often put together packages to give their employees attractive all-round cover. It’s advisable to get regular advice and to match the scope of cover to individual circumstances.

6. Outlook and conclusion

The insurance landscape in Switzerland is comparatively complex, but it also offers a lot of flexibility. UVG supplementary insurance (UVG-Z) helps close gaps in accident cover and adds comfort (for example through treatment by a private doctor). Daily sickness allowance insurance (KTG) protects against financial shortfalls when illness interrupts the salary. And extra-mandatory BVG allows better provision beyond the legal minimum.

For employers, these three building blocks are an important way to stand out in the competition for skilled employees. Attractive social benefits are a strong argument for many qualified people who value security and long-term financial stability. For employees, in turn, they are a way to reduce their own financial risk from unforeseen events considerably and to maintain their accustomed standard of living as far as possible after an accident, during a long illness or in old age.

In practice, it pays not to look at each insurance in isolation. Because the benefits partly interlock or complement each other, it is worth getting an overall picture. Some employers offer complete packages in which UVG-Z, KTG and BVG solutions are coordinated. Anyone who takes care of insurance on their own, or who chooses cover for their employees as a business owner, faces the task of picking the right partners and policy options.

In the end, there is no single solution that suits everyone. The ideal combination of insurance always depends on individual needs, personal attitude to risk and the available budget. Still, good cover in all three areas (accident, illness and occupational pension) is an essential part of social security in Switzerland, and can benefit companies in the long run too.

With rising healthcare costs and an ageing population, it is worth looking into the topic early and, where appropriate, opting for extended or extra-mandatory cover. That keeps risks low and noticeably cushions the financial impact of illness, accident or old age.

By Paymira Team