Too sick to be able to work permanently in your chosen job? A financial disaster for most people – occupational disability insurance is supposed to protect you. Some facts for those interested.
Do I need occupational disability insurance (BU) or not? “We recommend taking out the insurance because insurance against occupational disability is vitally important,” says Kerstin Hußmann-Funk, insurance expert at the Hamburg Consumer Center. It usually makes sense to take out insurance at a young age. But the question for many is: Can I also afford a BU? Because students or young professionals in particular usually don’t have a lot of money left over. On the other hand, the premiums are significantly lower if you take out a policy when you are young.
What does the amount of my BU contributions depend on?
The basic rule is: A BU pays a previously agreed pension if the policyholder is expected to be out of work for at least six months or longer due to illness or an accident – i.e. no longer able to practice his job at all or at least 50 percent of the time.
The monthly contribution amount is individual. Important aspects include: age, occupation, state of health, agreed pension amount and contract duration. What is also crucial is how much pension I would like to receive in an emergency and up to what age the insurance should take effect. The higher both are, the higher the contributions.
It is also about how likely the insurer believes the risk of occupational disability is. “There are also professions that are actually not insurable,” says Constantin Papaspyratos, chief economist at the Association of Insured Persons. These included flight attendants and professional firefighters.
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However, people who work in jobs with a high potential for stress, such as nursing staff, also pay high contributions. “The insurer asks about your current job,” explains Constantin Papaspyratos. “He wants to know exactly what your job is.”
What do I have to consider when it comes to health questions?
There are a whole range of health and risk issues. “This point is tough, and a lot goes wrong there,” warns the chief economist. The entire health history and leisure activities are queried for certain past periods – such as martial arts or motorcycling, but also smoking and narcotics.
“You have to read and answer it very carefully,” advises Constantin Papaspyratos. “Because if you want to apply for a BU pension later, the insurer will check whether you have answered completely and truthfully.” In the worst case, the insurance cover can be lost retroactively.
How high should my agreed BU pension be?
“A BU only makes sense if I protect myself properly,” says Kerstin Hußmann-Funk. This means that anyone who becomes unable to work should be able to maintain their standard of living thanks to BU – without falling into state aid systems.
The Hamburg consumer advice center recommends 80 percent of the monthly net income as a rule of thumb for the BU pension amount. For young professionals or students, at least 1,500 euros is generally recommended as the level of insurance. There are definitely upper limits, which are usually set by the insurer itself. “They are often 60 to 70 percent of the last gross salary,” says Constantin Papaspyratos.
And how long should the contract period be?
“It’s best to do it until you reach your actual retirement age,” advises Kerstin Hußmann-Funk. For example, up to the age of 67, if you receive an old-age pension from this point on. A model that grows with you is also possible, which some policies include. “If the retirement age is postponed again, the contract duration will grow with it, so to speak.”
A longer term usually makes the premium more expensive. However, as you get older, the risk of becoming unable to work also increases. “If you don’t have enough reserves, a gap between the end of a BU pension and the old age pension can be existential,” says the consumer advocate.
Is a contribution dynamic worth it?
Both experts recommend a dynamic contribution. This means that the monthly contributions increase every year – “that’s usually three to four, a maximum of five percent,” says Kerstin Hußmann-Funk. Of course, the BU pension that you receive in an emergency also increases.
There is also the option to suspend in phases – this means that the insurer does not have to increase the premiums every year. “The dynamics are announced in advance and you can object,” explains Constantin Papaspyratos. “Most contracts require you to raise every third time, but with newer contracts you can even opt out as many times as you like and then go back in.”
Can I top up the agreed pension later with a BU?
Yes, the so-called subsequent insurance guarantee is included in all new contracts, according to Constantin Papaspyratos. “Up to a certain age, for example 50, you have the option of increasing your BU pension by a larger amount in one step, for example by 500 euros,” says the chief economist.
However, this is often tied to specific occasions, such as a wedding, divorce, parenthood or salary increase. The insurers differ here with the reasons listed. Tip: See what could actually apply to you.
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Additional insurance can then be provided within six to twelve months. In this case, the insurers will refrain from asking health questions again. “But it can happen that he asks risky questions again, for example whether you now ride a motorcycle,” says Constantin Papaspyratos. And of course the monthly contributions increase as the pension increases.
How do I find the right insurer?
According to the consumer advocate, all major insurers in Germany generally offer good BU tariffs. According to the Federal Financial Supervisory Authority, there can be big differences between the providers. Hence the advice: “When comparing policies, check the exact scope of services.” You can get an initial overview of suitable tariffs from Stiftung Warentest, which, unlike many other comparison portals, does not receive a commission for its placement.
Kerstin Hußmann-Funk points out: What matters less is which provider you end up with, but rather whether you get a policy. In some cases, insurers reject applicants because of a previous illness.
“You should definitely avoid that, because once an insurer has rejected me, then I won’t be able to find anyone else who will insure me against BU,” explains the insurance expert. That’s why it’s important to first make a preliminary risk inquiry. This is, so to speak, a trial application. If there are two to three insurance policies that are possible, you can choose based on the price and the service offered.
Who will help me get a BU?
Insurance agents, insurance brokers and insurance consultants offer help with this. The differences: With an insurance agent you can only take out insurance with the company he works for. The insurance broker provides comprehensive advice. Both consultations are initially free, but the commission is later reflected in slightly higher contributions.
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Insurance advisors, on the other hand, are paid directly by the customer in the form of a fee. This ensures that their recommendations are not based on the amount of commission and are therefore independent in the interests of the consumer. Consumer advice centers also provide advice by checking offers and helping with selection.
