Lump-Sum Disability Benefit (Invaliditätskapital)

Concept and Preconditions

The lump-sum disability benefit is the core benefit of private accident insurance. It becomes payable when an accident causes permanent impairment of physical or mental capacity; under the German model conditions an impairment is permanent if it is expected to last longer than three years and no change in that condition is anticipated. The disability must have occurred, been medically certified and been notified to the insurer within specified periods (AUB 2020: 15 months after the accident in each case); missed deadlines forfeit the claim. If the insured person dies from the accident within one year, the death benefit replaces the disability benefit.

Assessment

The benefit is derived from the agreed base sum for disability, the degree of disability determined under the schedule of disability percentages or – outside the schedule – by an overall medical assessment, and any agreed progression. Pre-existing disability and the contributory share of illness or infirmity reduce the creditable degree of disability. The decisive state of health is the one that is discernible no later than the end of the third year after the accident; until then either party may request annual reassessment, frequently over a longer period for children. As a fixed-sum benefit, the capital is paid irrespective of proof of a specific financial loss.

Delimitation and Practice

The lump-sum benefit must be distinguished from the accident annuity as a recurring benefit and from social insurance benefits: Swiss mandatory accident insurance pays earnings-related disability pensions and an integrity compensation, the Austrian disability pension is linked to reduced earning capacity, and German statutory accident insurance responds only to occupational and commuting accidents. The private lump sum supplements these systems regardless of where and when the accident occurs and, in group personal accident schemes, is frequently set as a multiple of annual salary. An example from Swiss practice: collective wordings assess the lump sum on an integrity scale modelled on Art. 24 UVG or on the higher of the degree of disability and the integrity compensation, make it due when the UVG pension starts, set it off against any later death benefit and cap it for insured persons aged 70 or over (e.g. at CHF 50,000); once paid, there is neither top-up nor recovery.