Disability Insurance
Imagine not being able to work due to illness or an accident – how would that affect your financial future? A disability insurance protects you exactly against this risk. It ensures a regular income if you are permanently unable to work in your profession due to illness or accident. This way, you remain financially secure and can focus on your recovery without having to worry about your livelihood.
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The earlier you take out disability insurance, the lower the premiums. You don't have to fear that a sudden illness or accident will jeopardize your quality of life. Protect yourself now with a tailored solution that fits your profession and lifestyle.
This way, you're prepared for any eventuality and can feel secure – both today and in the future.
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One of our disability insurance experts is ready to help you find the right coverage to ensure your financial security in case of unexpected events.
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What happens?
The transition from health to sickness benefits and eventually to disability pension is a process that takes place in several stages and can vary depending on the individual situation. Here’s an overview of the typical process:
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Health deteriorates: The process begins when a person becomes unable to work due to illness or an accident and is no longer able to perform their job. The person should immediately inform their employer and obtain a medical certificate (sick note) from their doctor.
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Continued salary payment by the employer: In the first six weeks of incapacity to work, the employer typically continues to pay the salary, known as continued salary payment during illness. This applies only if the person is subject to social insurance contributions.
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Sickness benefit from the statutory health insurance: After the six-week period, the statutory health insurance takes over the sickness benefit if the incapacity to work persists. The sickness benefit is generally 70% of the gross income, but no more than 90% of the net salary. Sickness benefits can last up to 78 weeks, depending on the severity of the illness and the health insurance provider.
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Assessment of disability: If the incapacity to work continues for a long period and a full or partial return to the profession seems impossible, the person’s eligibility for a disability pension is assessed. The individual must submit an application to the German Pension Insurance (Deutsche Rentenversicherung). They will evaluate the health condition to determine if the requirements for a disability pension are met.
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Disability pension: If the person’s ability to work is permanently impaired (either to less than 3 hours, between 3 and 6 hours, or between 6 and 8 hours per day), the disability pension is typically granted. This can be either a full or partial disability pension, depending on how much the person can still work.
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Permanent support: The disability pension is paid until the person fully recovers or reaches retirement age. If the health condition improves, a reassessment may take place, and the entitlement to the disability pension could be revoked or adjusted.
It is important to note that the disability pension often does not provide enough to maintain the standard of living. For this reason, it is advisable to also have a private disability insurance to cover the financial gaps.
The causes
About one in four people in Germany experiences a phase during their working life when they can no longer work due to health issues. While this may seem unimaginable to many, it is a serious risk that can affect anyone.
Disability does not only affect people in physically demanding jobs.
Nearly a third of cases of disability are due to mental health issues. Overwork, burnout, and depression are increasingly common, especially in office jobs.
If such an illness affects you, it is crucial to focus on your recovery without having to worry about financial difficulties. A disability insurance or basic ability insurance can help, as they provide financial support if you become temporarily or permanently disabled, or lose a physical or mental ability.
Your options
There are several options to protect your own workforce and protect yourself from the financial consequences of occupational disability or incapacity to work.
Here are the most important options:
Occupational disability insurance
A disability insurance is one of the most important forms of protection for employees, self-employed individuals, and freelancers. It safeguards you against the financial consequences if, due to illness, an accident, or a mental health condition, you can no longer work in your trained profession. Unlike the statutory disability pension, which only applies if you can no longer work in any profession, the BU insurance offers significantly higher protection, as it is specifically tailored to your individual occupation.
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In the event of disability, the insurance pays you a monthly pension that helps you maintain your standard of living and cover ongoing costs such as rent, loans, or living expenses. The policy is usually arranged so that the monthly benefit is adjusted to your personal needs, and the amount is determined according to your income situation.
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The amount of the monthly payment and the extent of the coverage can vary depending on the benefits and additional options you choose in your contract. For example, additional benefits such as a "dynamics clause" (automatic increase of the pension over the years) or a "guarantee to increase coverage" (which allows you to adjust the coverage amount if your circumstances change) can be valuable options.
Additionally, it is advisable to take out the insurance early, as premiums tend to increase with age and health risks. The younger and healthier you are when you sign the contract, the lower the monthly premiums will be.
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In short, a disability insurance is essential protection to shield you from the financial consequences of potential disability and to maintain your quality of life even during difficult times.
Basic ability insurance
A basic ability insurance protects you financially if you lose important physical or mental abilities due to illness, an accident, or another cause, which are necessary to perform your profession. Unlike disability insurance, which pays out if you can no longer perform your entire job, basic ability insurance focuses on the loss of specific "basic abilities" such as seeing, hearing, speaking, walking, or even being able to climb stairs independently. If you permanently lose one of these abilities, the insurance steps in and provides a monthly pension or a lump sum payment.
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Basic ability insurance is particularly useful if you work in a profession that is not fully covered by a disability insurance or if you cannot opt for a traditional disability insurance due to pre-existing health conditions. It is often cheaper than a disability insurance because it offers less extensive coverage and only protects against specific, defined abilities.
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If you lose one of these abilities, such as through an accident or severe illness, you can rely on the benefits of the basic ability insurance to avoid financial hardship and continue to support yourself. The exact definition of the insured abilities and the amount of the monthly pension may vary depending on the provider and contract.
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A basic ability insurance is a good supplement to disability insurance, especially if you are looking for specific protection for the loss of essential physical or mental abilities that may not necessarily be related to the loss of your entire occupation. It’s important to carefully review the covered abilities and contract terms to ensure that it meets your needs.
Accident insurance
An accident insurance protects you financially if you suffer bodily harm from an accident that leads to permanent impairments of your health. It covers the costs arising from the accident and pays a lump sum or a monthly pension if the accident results in permanent disability. Unlike statutory accident insurance, which only applies to work-related or commuting accidents, private accident insurance also covers accidents in leisure time or in private settings.
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The insurance can include various benefits depending on the policy, such as the payment of a disability pension, a hospital stay bonus, daily allowances during recovery, or death benefits for the surviving family members in case of a fatal accident. Many providers allow you to tailor the coverage amount and type of protection to your individual needs.
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Private accident insurance is particularly useful if you work in a profession with a higher risk of accidents or if you want additional protection for accidents that occur in your private life. It can also be a valuable complement to statutory accident insurance, as the latter only provides limited coverage and often does not cover all private accidents.
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Accident insurance is relatively inexpensive and offers comprehensive protection against the financial consequences of accidents that can happen in everyday life, during leisure activities, or while traveling. As with other types of insurance, the earlier you take out the policy, the lower the premiums, especially if you are young and healthy.
Dread-Disease Insurance
A Dread-Disease Insurance protects you financially, if you are diagnosed with a serious illness such as cancer, stroke, heart attack, or other major diseases. This insurance pays out a lump sum or a monthly pension to help cover the financial burdens that can arise from such an illness, such as treatment costs, rehabilitation, or loss of income if you are unable to work due to the illness.
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Dread-Disease Insurance is especially important, because treatment for severe illnesses often incurs high costs that are not always fully covered by statutory health insurance.
It also allows you to pick and choose costly treatments that are not covered at all by the statutory health insurance, but are promising for your recovery.
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Additionally, the loss of income during a prolonged illness can lead to financial strain. With this type of insurance, you can ensure that you can focus on your health during recovery without worrying about financial difficulties.
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The amount of coverage and the number of insured illnesses vary depending on the provider and policy. Typically, the most common severe illnesses, such as heart attacks, strokes, certain cancers, or kidney diseases, are covered. The advantage of this insurance is that the payout can be used independently of the cause of the illness or the type of treatment.
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Dread-Disease Insurance is a valuable supplement to health insurance, as it specifically addresses the financial challenges that arise from losing health and the ability to work due to a severe illness. This insurance provides essential financial support and can help maintain your quality of life during challenging times.
In life, unforeseen events can occur that temporarily or permanently prevent us from being able to work. In such moments, it is crucial to focus on recovery, but financial worries can add additional stress.
This is where income protection comes into play: it allows you to prioritize your health while ensuring that your standard of living and financial security are protected. It is a valuable complement to the state system, which often provides insufficient coverage in case of disability due to illness or accident.
Our experts are here to help you find the income protection that suits your needs. Are you concerned that pre-existing conditions or your profession might exclude you from disability insurance? We are happy to take the time to review your personal options and find the best solution for you.