What is an occupational disability insurance?

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Rea­sons named for not buy­ing an occupa­tio­nal disa­bi­li­ty insuran­ce [2]

Too expen­si­ve 54%
Money is spent on other things 52%
Cove­r­ed through other mea­su­res 49%
Cove­r­ed by my fami­ly / by my part­ner 42%
Too old / young for a disa­bi­li­ty insuran­ce 41%

To put it sim­ply: the occupa­tio­nal disa­bi­li­ty insuran­ce pro­tec­ts you against the loss of inco­me should you no lon­ger be able to work.

Occupa­tio­nal disa­bi­li­ty insuran­ce is a some­what pecu­li­ar case becau­se it is simul­ta­ne­ous­ly seen as extre­me­ly important yet few peop­le actual­ly have one.

Put in num­bers, it is con­sistent­ly named as one of the top five most important insuran­ces, almost 20% of Ger­mans even name it as one of the three most important insuran­ces to have [1]. Yet only 16% — 40% (depen­ding on sur­vey and age of par­ti­ci­pants) actual­ly have an occupa­tio­nal disa­bi­li­ty insuran­ce plan [2].

The main rea­son is often the pri­ce, many think (often incor­rec­t­ly) that the occupa­tio­nal disa­bi­li­ty insuran­ce will be too expen­si­ve for their par­ti­cu­lar case. Addi­tio­nal­ly, the­re are many mis­con­cep­ti­ons, e.g. that an acci­dent insuran­ce also covers occupa­tio­nal disa­bi­li­ty.

Espe­ci­al­ly many free­lan­cers and self-employ­ed find them­sel­ves in a dilem­ma: when they are young, the thin­king often goes along the lines of “not­hing will hap­pen to me” or the money is nee­ded else­whe­re. Once they get older, the pre­mi­um can inde­ed get high or insuran­ce com­pa­nies will sim­ply not take them any­mo­re.

What are the benefits of an occupational disability insurance?

Occupa­tio­nal disa­bi­li­ty insuran­ce helps you secu­re your finan­ci­al live­li­hood if you can no lon­ger work.

The main bene­fit is a mon­th­ly pen­si­on. You will recei­ve this pen­si­on for as long as you are above a cer­tain degree of disa­bi­li­ty (usual­ly 50%).

To put it more clear­ly, as long as you can­not work becau­se of your health, you will recei­ve a mon­th­ly pay­ment.

Other important bene­fits inclu­de things such as reinte­gra­ti­on mea­su­res, coun­sel­ling on reha­bi­li­ta­ti­on or pro­fes­sio­nal reinte­gra­ti­on cour­ses. For all bene­fits regar­ding disa­bi­li­ties, the insuran­ce com­pa­nies put reha­bi­li­ta­ti­on first and pen­si­on second.

How high your pre­mi­um will be, depends on a num­ber of aspec­ts. The most important ones are your age when you buy into a plan, the dura­ti­on of the mon­th­ly pen­si­on and your occupa­ti­on. How much you pay, direc­t­ly affec­ts the mon­th­ly pen­si­on you will recei­ve.

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29% — 43%

Likeli­hood of an occupa­tio­nal disa­bi­li­ty up to the reti­re­ment age of 65 [3]

Who should get an occupational disability insurance?

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Cau­ses of occupa­tio­nal disa­bi­li­ty [2]

Men­tal ill­ness 31%
Skeletal appa­ra­tus and mus­cu­los­keletal sys­tem 21%
Other ill­nes­ses 15%
Mali­gnant ulcers (e.g., can­cer) 15%
Acci­dents 9%
Car­dio­vascu­lar disea­ses 7%

Rare­ly are the recom­men­da­ti­ons for an insuran­ce so clear and unani­mous. Con­su­mer advo­ca­tes, the government and NGOs such as the “Bund der Ver­si­cher­ten“ recom­mend:

In view of the serious eco­no­mic con­se­quen­ces of occupa­tio­nal disa­bi­li­ty, we advi­se every working per­son to take out an occupa­tio­nal disa­bi­li­ty insuran­ce“ [4].

The rare agree­ment is main­ly due to two things:

The sta­te disa­bi­li­ty pen­si­on is rare­ly enough to main­tain the stan­dard of living and free­lan­cers are often not even eli­gi­ble for this pen­si­on.

In addi­ti­on, the rea­sons for disa­bi­li­ty are unfor­tu­n­a­te­ly diver­se and often age-inde­pen­dent. Modern busi­ness life is stress­ful and psy­cho­lo­gi­cal­ly based occupa­tio­nal disa­bi­li­ties such as bur­nout are increa­singly com­mon.

It is also worth not­ing that insu­rers’ refu­sal rates are low.

Free­lan­cers and self-employ­ed per­sons are stron­gly recom­men­ded to have an insuran­ce that covers the ina­bi­li­ty to work. We can help you make an infor­med and qua­li­fied decisi­on.

Questions? We have answers.

For occupa­tio­nal disa­bi­li­ty insuran­ce the old say­ing holds true: the soo­ner, the bet­ter (and che­a­per).

We will get back to you wit­hin 24 hours — wit­hout any com­mit­ment from you and in your pre­fer­red way.

 

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