Sick leaves lead to much lower income in Estonia : SEB

Temporary loss of capacity for work leads to a decrease in the employee's wages which, in case of a longer certificate of sick leave, may reach to up to 80% of total wages in Estonia. In order to avoid a shortage, it is necessary to establish monetary buffers or conclude an insurance contract that covers the decrease in income in case of illnesses with critical impact, SEB said in a statement, cites LETA.

"In the world, the incapacity for work is mainly caused by myocardial infarction, stroke, or malignant tumour in a total of 95% of all cases. Estonia is no exception, and the same diseases often lead to an incapacity for work. Decreases in income due to severe illnesses and high rehabilitation costs have prompted Estonians to insure themselves more against that particular risk," said Indrek Holst, Chairman of the Management Board of SEB Elu- ja Pensionikindlustus.

A 35-year-old uninsured person who has lost the capacity for work and whose treatment lasts over a year, and whose monthly net income has been 1,000 euros, is entitled to the following benefits: for the first 182 sick days, the Health Insurance Fund shall indemnify 70% of wages, meaning that 300 euros is not received each month; during the next 182 sick days, the employee who has fallen ill shall receive pension for incapacity for work of about 214 euros each month, if the incapacity for work is 100%, meaning that the difference with the monthly net wages is 786 euros.

In the example, there will be a shortage of 6,510 euros from the regular income during the recovery period.

the increased expenses for medications during the treatment period and rehabilitation need to be added.

With an extra critical illness cover in the amount of 12,000 euros (optimum insured sum is annual net salary), the monthly insurance premium would be 16 euros. In case of illness, the insurance shall immediately pay the full amount. According to SEB Elu- ja Pensionikindlustus, the average age of clients entering an insurance contract to protect against critical illnesses is 35 years (34.6 for men and 36.2 for women) and the%age of contracts signed by men and women is practically equal. The statistics also show that when income and obligations increase, people start to think more about insurance, protecting themselves and their family from getting into difficulties.

SEB Elu- ja Pensionikindlustus has in the eight months of 2013 indemnified 308 insured events in the amount of about 380,000 euros.