An accident or illness can prevent us from working for a more or less prolonged period of time.
To the physical consequences of the mishap, we must add the loss of income, which, in cases such as those of self-employed professionals, is aggravated because their expenses continue.
Temporary work disability insurance (ILT) helps workers to alleviate economic damage during a period of convalescence.
What is Temporary Disability?
Temporary disability, also known as medical leave, is a situation in which a worker cannot carry out their professional activity temporarily due to a common or professional illness or an accident at work or not at work.
In addition to having the right to public health care, the worker will receive an economic subsidy from Social Security depending on the origin of the disability (whether it is for work reasons or not).
Which will be equivalent to between 60 and 75% of the base regulate your salary.
There is, of course, a limit to temporary disability, which is 545 days, more specifically 365 days, although the National Institute of Social Security can extend it by 180 more days if it appreciates that during that extra time the worker will be able to recover of their ailments and return to their job.
How does ILT insurance work?
The temporary disability or sick leave insurance aims to compensate any worker, self-employed or employed, for the loss of income that they may suffer as a result of not being able to work temporarily due to illness or an accident, whether at work or not.
There are two types of ILT insurance: scaled and non-scale.
In insurance without a scale, compensation is received for each real day that the insured is sick, which increases the price of the policy. It is the insured who chooses the amount to receive, the duration (at the expense of a doctor’s criteria).
And, where appropriate, the excess at the time of contracting the insurance. With franchise, the cost is reduced, but collection does not begin until the days agreed upon have passed.
In the scaled insurance, the compensation depends on the type of pathology suffered, so compensation is received based on the days set in the scale established by the insurer and the capital that has been contracted.
For example, if the company has assessed a leg break in 40 days and the contracted capital is 100 euros, it will pay 4,000 euros in total, even if the worker is off work for fewer or more days.
Who needs this Insurance?
It is very important insurance for any self-employed or employed worker, since, although sick leave is paid by Social Security with a daily subsidy that covers loss of income while unable to work, in case of common illness or non-work accident nothing is charged until the fourth day of the leave issued by a doctor.
And from then on, only 60% of the regulatory salary base is received. If the leave lasts for more than twenty-one days, this amount rises to 75%, the same percentage that is charged from the first day in case of illness or accident at work.
Of course, you have to know that it is an insurance that can only be contracted by workers who are listed in Social Security with an age between 16 and 65 years.
Therefore, the unemployed, volunteers (who do not receive compensation), students, retirees and rentiers are excluded.
What are the Coverages?
The ILT insurance has a main coverage: daily compensation in the event of temporary disability due to illness or accident.
Which prevents you from carrying out your professional activity, for which you are either admitted to a hospital or resting at home. This temporary leave must be certified by a doctor, who must delimit it in time.
In addition, there are a number of additional coverages. One of the most frequent is health care, to receive medical care for the accident or illness that caused the leave.
In addition, there are coverages that compensate in the event of having to be admitted to a hospital and others that cover childbirth, even if it is not an illness.
You can also take out coverage for permanent or absolute disability or those corresponding to Death insurance.
Likewise, it is common to be reimbursed for expenses if the insured is in a situation of great dependency due to an accident.
So that they will receive full reimbursement of social and health expenses derived from their condition, such as adapting their home familiar.
Sick Leave Insurance for Self-Employed
ILT insurance is especially important for self-employed workers since it financially protects the worker against accidents or illnesses that prevent them from working temporarily, with the consequent loss of income.
While they have to face a series of fixed expenses, such as the rent of the commercial premises, the payment to suppliers or the expenses of electricity.
This daily financial compensation for illnesses allows you to continue your business, without the danger of a possible closure if the leave is prolonged over time.
It should not be forgotten that in the event of not being able to work due to illness or accident, the self-employed person receives a maximum of 75% of the contribution base from Social Security.
But must continue paying their own-account worker quota for at least first two months, which substantially reduces your income.
In the case of a self-employed person who is listed on the minimum base, this would mean charging only 271.05 euros per month.
Final Words
It is clear that temporary work disability insurance is a guarantee that income will not be greatly diminished, since the compensation received by the insurer is compatible with similar benefits offered by the mutual or the Security Social.
In addition, an ILT insurance provides tax advantages, since the self-employed and professionals can deduct up to 500 euros per year from it in the income statement in the part corresponding to their own coverage and that of their spouse and children under 25 years of age who live with him.
The maximum deduction limit is 500 euros for each one of them or 1,500 euros for each one in case they have a disability.
Companies that provide this insurance to their workers will also have this tax advantage. However, it must be taken into account that these deductions are not contemplated.
It is also a very flexible and configurable insurance, since the daily compensation will depend on what has been agreed in the contract, so it can be limited to covering only expenses or also include residual income and even the hiring a replacement.