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.
Parity
Applied to occupational pension plans this term means that the administrative body of a particular plan must consist of an equal number of employer representatives as of employees, regardless of the total amount of paid contributions. The principle of parity must be observed by all registered private-law occupational pension plans irrespective of whether they pay out only the mandatory BVG/LPP benefits or benefits in excess of this minimum.
Pension benefits
Benefits from the AHV, occupational pension plans and extra-mandatory insurance (i.e. cover that is over and above that required by law) which the insurer provides when the insured person reaches retirement age. This includes a old age pension, a child's pension, a helplessness allowance and contributions towards special aids.
Pension plan regulations
The pension plan regulations govern the occupational pensions provided by the pension plan and specify the rights and obligations of all participants. These regulations are issued by the governing body of the pension plan.
Pension statement
The pension statement is an information document for the insured person and contains details about personal entitlements and obligations and the actual amount of these, e.g. pension fund certificate, AHV/AVS certificate.
Period of non-availability
Period during which an insurance company, on the occurrence of an insured event, does not have to pay benefits from the commencement of the contract. A period on non-availability should not be confused with a waiting period. A period of non-availability is unique and is established for a stipulated period from the commencement date of the contract. At present, periods of non-availability are rarely met with in the field of life insurance (except, for instance, in cases of suicide).
Policy
The policy is a private document setting out the rights and obligations of the parties which is to be issued by the insurer to the policyholder (VVG/LCA 11). The policy serves as proof that an insurance contract has been concluded and of its contents (VVG/LCA 12). It is not a prerequisite for the conclusion of the insurance, rather the outcome thereof. It is not a security, but is considered equivalent to a security for the purposes of declaration of invalidity (VVG/LCA 13).
Policyholder
The contractual partner (individual or group) of the insurer.
Premium
The premium is the price that the policyholder pays to the insurer in return for which the agreed benefits are provided in the event of a claim. The premium is generally calculated for a period of insurance, a year unless otherwise specified, even if other payment methods are agreed, e.g. monthly instalments, single premium.
Premium payment waiver
The insured person is freed from the obligation to pay premiums if he/she becomes unable to work or disabled during the term of the insurance. The insurance company takes over the remaining premium payments corresponding to the insured person's level of disability. The insurance will continue without change. In the context of a contract on two or more lives, a premium payment waiver in the event of the death of one of the insured persons allows the coinsured persons to continue the contract without premium payment
Premium refund
Premium refund is mostly used in connection with old-age pensions. It implies that, in the event of the insured person's death, the premiums paid or the single premium (without interest) are paid out - after deduction of any pension payments already made - to the person designated as beneficiary in the contract's beneficiary clause. Premium refund also exists in life insurance. On the death of the insured person, the premiums already paid are refunded, also without interest.
Promotion of home ownership (BV)
Retirement savings from the occupational pension can be used to purchase a home (with certain restrictions).
Proposal or application
The application is the expression of will by which the applicant expresses his/her will to conclude a contract in binding fashion, such that a positive counter-declaration (acceptance) by the recipient is all that is required for the establishment of the contract. The application for concluding an insurance contract is normally initiated by the person interested in obtaining insurance (the potential policyholder). It must contain all objectively significant contractual points (insured perils, insured objects, insured benefits, premiums, inception and duration of the insurance) and any other points that either party considers to be significant. Normally an application form is used to make an application. The GCI are either included in this or are referred to therein. In the latter case, the GCI must be issued to the applicant before submission of the application, as otherwise the application is not binding. The applicant is bound to the application for 14 days from the date of sending (if a medical examination is required, this period is four weeks). During this period the insurer may confirm acceptance of the application which will have the effect of concluding the contract. Confirmation of acceptance is normally effected by sending the policy or the invoice for the first premium to the policyholder. If confirmation of acceptance is received by the applicant with a delay or if changes have been made to significant contractual points, this is a new proposal issued by the insurer to the potential policyholder which the latter has to accept in order that the contract may be established.