Disability insurance

Although one out of every four employees retires from work before retirement, too few people think that the loss of labor is financially secure. Not for nothing does the consumer center describe occupational disability as a “misjudged danger”. Because who can no longer work, no longer earns money. Here, occupational disability insurance provides indispensable protection.

Why is occupational disability insurance useful?

Not every person is able to work through to regular retirement. Especially in physically demanding occupations the point is reached at some point at which working people can not continue working. Even if they are entitled to the statutory disability pension, they have to expect considerable financial losses due to the loss of their monthly income.

The same applies to people with a job without physical effort. If affected people can not work until shortly before retirement, leaves

If necessary, the income loss can be balanced with reserves. As a rule, however , those who are unfit for work have several years left to retire .

On average, in 2015, the state paid around 711 euros a monthly disability pension if beneficiaries can do any job less than three hours a day. Anyone who has earned well before can hardly keep their standard of living or pay running costs such as rent or credit. The reduction in earning capacity thus brings the unemployed into serious financial difficulties .

To prevent this, a disability insurance makes sense . Since the most common cause of occupational disability is now no longer physical suffering, but mental illness, it is recommended for each person – whether she is working in an office or working in construction.

As a rule, the insurance already pays out a monthly pension if the insured can no longer exercise their last job 50 percent . In order to have a claim to the state disability pension, it must first be proven that those affected can not be permanently employed in any other job.

In principle, the persons should seek a disability insurance that:

  • depend on their income as sole or main earner
  • are not covered by statutory health insurance and thus are not entitled to state benefits in the event of reduced earning capacity, such as self-employed and freelancers

What kind of benefits does an occupational disability insurance offer?

The occupational disability insurance pays out a monthly pension fixed by the insured in case of permanent occupational disability. It is irrelevant whether this can no longer pursue his last practiced profession because of a disease or an accident. Here this insurance differs from the private accident insurance.

The amount of the monthly pension should be sufficient to cover current costs such as rent, loan payments, food, insurance and pensions. The orientation is a pension equal to 80 percent of the household’s net income . Alternatively, those interested can sum up their monthly expenses and take out those that drop out when they can no longer work. The remaining amount indicates what the pension due to occupational disability should be at least.

With the occupational disability insurance, different additional benefits can be agreed, which are already standard features of many insurers, in particular occupational disability insurance test winners:

power Examples
Nachversicherungsgarantie Hereby, the amount of the monthly pension can be adapted to the new requirements on certain occasions, such as marriage or offspring, without health issues being raised again. However, insurers may in some cases cover the age until which the guarantee can be used and the amount up to which customers may top up.
dynamics This option regularly increases the contribution in the saving phase by a few percent. This increases the BU pension, which compensates insured for the effects of inflation. Without dynamics, the agreed amount of benefits loses real purchasing power.
Renunciation of abstract reference If this clause is in the contract, the insurance company may refuse to pay the pension if the policyholder could theoretically work in another, equivalent profession. Interested parties can find out more about the abstract reference in the guide to occupational disability insurance.
Length of the performance time As a general rule, the insured person should pay a pension until the beginning of the regular retirement age. In order to save costs, a shorter period, for example up to the age of 65, can be agreed. However, insured persons then have to financially bridge the time until the statutory pension is paid.
Retroactive benefits In particular, if the occupational disability is found delayed, it is advantageous if the insurance pays retroactive benefits. Depending on the provider, this is possible for up to three years.
waiting times With waiting times, customers can reduce their contribution. However, in an emergency, they then have to wait for a certain period of time, about six months, until the insurance company begins to pay out the monthly pension.
Set forecast period This determines the duration of disability according to the opinion of a doctor. Insurers usually provide when customers are expected to be incapacitated for six months.

Health check for occupational disability insurance is essential

Each occupational disability insurance includes a health check, although the questions asked about illnesses and treatments and the requested period may differ depending on the insurer. Interested parties should be careful to choose a provider who will request at most the last ten years for hospital stays and the past five years for outpatient treatment.

In addition, it is advisable to answer the health questions in peace and in conversation with the family doctor . Because this knows from the medical records, which diagnoses were made. For example, applicants later do not jeopardize the disbursement of the BU pension for forgetting information or misinterpreting treatments.

Editorial Tip: Use anonymous request

In particular, when presenting multiple pre-existing conditions, it makes sense to first perform an anonymous request for risk through an insurance expert. No personal data will be passed on. Refusals can not be stored in the information and information system of the insurer.

Alternatives to occupational disability insurance

Those who can not or do not want to take out occupational disability insurance have the option of protecting themselves against other workers’ loss of workforce. These include:

  • Disability insurance: It pays if insured persons can not practice their current or any other job.
  • Private accident insurance: In the case of accident insurance, policyholders receive a one-off benefit or an accidental pension, depending on the contract, if they are permanently impaired in their health after an accident. Illness does not cover the insurance.
  • Dread Disease Insurance: The so-called “serious illness insurance” covers serious diseases such as cancer, heart attack, multiple sclerosis and stroke. A single insurance sum will be provided.

Combine occupational disability insurance with other insurance?

Occasionally, occupational disability insurance is offered as a supplementary component to other insurance such as term life insurance or pension insurance. How useful it is to combine the two hedges, interested people should think carefully and seek advice from an insurance specialist. As a rule, it is better to make an independent occupational disability insurance.

In this way, there is no risk that insured persons lose their insurance cover if they can not afford the contributions for the combined insurance due to a financial shortage. If separate contracts have been agreed, for example, the pension insurance can be provided without contributions, while the contributions to the occupational disability insurance continue to be provided.

How much is the important financial protection for disability?

The cost of occupational disability insurance depends on various factors, such as age, occupation, amount of monthly pension, state of health and duration of insurance. The younger and healthier a person is at the time of insurance, the lower the monthly contribution. The risk group of the profession has a big influence on the premiums. Therefore, it is particularly difficult for artisans to find affordable insurance. According to an evaluation by the rating agencies Franke and Bornberg, for example, masons pay more than five times as much a month as mathematicians or graduate engineers.

In order to reduce the costs, it is possible to keep the amount of the BU pension low or to shorten the benefit period. However, interested parties should always be aware that this step must balance the remaining income gap elsewhere . In a conversation with an expert on risk prevention, they learn how the contribution to occupational disability insurance can best be optimized.

When comparing different offers, it is important to pay attention to the difference between gross and net contribution . The gross premium indicates how much the net or payment amount can increase if the insurance company generates lower surpluses than expected or if more insured persons receive benefits than expected.

Only a few providers have no difference between the two amounts, while for others the spread between the two amounts can be large. If you do not want to run the risk of significant premium increases, you should choose an insurer with higher net and lower gross premiums. Here, too, interested parties can find a suitable rate with the help of tips from an insurance expert.