Portuguese Social Security makes disability pension payments to people who cannot work due to a disability, or who need care and supervision. The disability, either physical or mental, must be of a permanent nature and prevent the person from working. The amount of the pension depends on the number of working years and total contributions to Social Security.
In addition to social security, Workmen’s Compensation is a mandatory insurance that employers are obligated to contribute to. Workmen’s Compensation includes both partial and total disability, as well as temporary and permanent disability. In the case of partial disability and temporary disability, the objective of this insurance coverage is to rehabilitate as quickly and as efficiently as possible via medical treatments and guidance so that the employee can resume professional activity.
In the case of total disability and permanent disability, the Workmen’s Compensation Insurance provides the financial support that the employee will require due to the absence of a professional income.
The level of benefits does not include lump sums but always temporary payments or lifetime annuities which are determined by the law and have each employee’s salary as the basis of calculation.
Disability Management Practices Supplemental Disability Programs
Disability coverage is available as an add-on to several insurance products; however, it is always as a rider. Therefore, it is not possible to contract disability coverage without it being a part of a wider package. It is most commonly included on an Accidental Death or Life Insurance policy.
Under a group policy, the most common level of benefit is a multiple of salary, typically one- or two-times annual salaries, which locally corresponds to 14 or 28 months of salary. Under a life policy, accidental death or accidental disability usually double the sum assured contracted for a natural death or natural disability.
There is still a third layer in terms of sum assured: in the event of death or disability due to a traffic accident, the sum assured is usually the equivalent to three times the one foreseen for natural causes.
In terms of optional products that include disability coverage, Group Life is by far the most common insurance solution chosen by employers when designing their Insured Employee Benefits policy.
From the employee’s perspective, however, the Group Life & Disability coverage, although considered very important, is not as much valued as a Group Medical Insurance, which can be extended to spouses and children.