Recovery instead of social welfare:

illness or accident – the risk of occupational disability is high. Insurers offer various models for protecting oneself against financial ruin – – coverage can be obtained thru an income protection insurance !

Anyone who is chronically ill and can, therefore, no longer work faces the threat of social decline. Only considerable savings or insurance can provide relief. It is not for no reason that consumer protection groups and insurance experts have been recommending the acquisition of private occupational disability insurance in Germany for years, in a rare instance of agreement between the two.

INcome Protection

1. Occupational disability insurance: This is paid out if the doctor determines that the insured party can no longer practice his occupation in the long-term.
Many people forgo the acquisition of disability pension insurance or occupational disability insurance due to the cost. The figures are still staggering: Almost one in every four employees will become either entirely or partially incapable of working due to health problems. Anyone who is younger than 45 years old only receives a pittance from the state. Of course, freelancers and the self-employed get nothing at all. At the same time, more than three quarters of employees are not insured against occupational disability.
In addition to stand-alone occupation inability insurance or the corresponding supplementary insurance coupled to endowment or term life insurance, there are further options for protecting one’s own ability to work: basic capacity insurance, disability pension insurance and serious illness cover, also called dread disease insurance, (see table below). the ideal insurance for most is still the occupational disability insurance (German: Berufsunfähigkeitsversicherung ). But in case such an insurance is not suitable for you, there are other ways for some coverage as follows:

Less Risk, Smaller Contributions
2. The one most similar to occupational disability insurance is disability pension insurance (German: Erwerbsunfähigkeitsversicherung). A pension is paid, if long-term physical or mental restrictions prevent the insured party from working up to three hours per day. In the case of occupational disability insurance on the other hand, the agreed pension should come into effect if the insured party can no longer work at his previous occupation to 50 percent. Disability pension insurance only protects the ability to pursue any occupation.
A 30-year-old architect who is still able to work four hours per day as a museum attendant is, therefore, not unfit for work. Disability pension cover would cost him only30-50 Euro per month from a number of insurance companies in Germany and would provide a pension of 1,000 Euro. Occupational disability supplementary insurance will of course cost more. The amount of the rate depends primarily on the amount of the monthly pension, the age and occupation of the insured party as well as the term of the contract.
Disability pension cover is, above all, low-cost basic provision. In addition to this, it is suitable for persons with risky occupations, who have to pay considerably higher premiums for classic occupational disability insurance or cannot get any occupational disability cover at all
3. Basic capacities insurance offers an even more rudimentary form of cover. This first comes into effect if elementary human capacities are lost, such as sight, speech and the use of one’s hands as well as the ability to drive or climb stairs. Contrary to expectation, it is not accidents but rather illness that usually leads to the loss of certain physical capacities.
What is special about this product? The basic capacity pension is not coupled to the question of whether the insured party can work. If, for example, a person who has gone blind finds a new job as a masseur or telephonist, the pension or the capital continues to be paid out. That would be unthinkable in the case of most occupational disability insurance and disability pension insurance. With a good dread disease insurance, a 35-year-old receives a monthly pension of 1,000 Euro from around 40 Euro per month

4. Dread disease insurance – Financial Assistance As Soon As You are Diagnosed
Basic capacity insurance is not a full replacement for dread disease or occupational disability insurance. What insurance is offered to whom depends primarily on their occupation. Academics become unfit for work less often than those with physically demanding occupations. Unlike a roofer, a lawyer or teacher can continue to work in a wheelchair despite motor system disorders, In this case, an academic is not unfit for work and the insurance company for an occupational disability insurance does not pay out. It is extremely annoying if you have chosen to protect yourself and then have to fight with the insurance company about whether or not you are sufficiently ill.

Insurance policies against serious illnesses  (aka Dread disease insurance or Critical Illness insurance) are just as pragmatic here. Similar to basic capacity insurance, they pay out if one is affected by one of approximately 30 serious illnesses – regardless of whether the insured party can continue to work or not. The decision between occupational disability or dread disease is essentially a philosophical question: Would I prefer a pension for the duration (possibly temporally limited occupation disabilities) or will I gain more freedom at the moment when I become ill with a lump sum payment.
Not all serious illnesses covered by dread disease insurance necessarily end in death. The most frequently occurring illnesses, such as heart attack, stroke and cancer with one million new cases in Germany each year, have ever-improving chances of recovery. However, someone who cannot go back to working 80 hour weeks as a law firm without putting their health at risk again after surviving a heart attack is simply unemployed – and not unfit for work. Again, they would not be left empty-handed with occupational disability insurance.

What insurance do I need?
Pension or Lump Sum Payment?
For freedom in form, with insurance benefits in the amount of 150,000 Euro in the case of lifelong insurance protection, a 35-year-old non-smoker still has to pay 10-150 Euro per month for dread disease insurance with good providers. The tariff also offers an option in the form of a mini-occupational disability policy for psychological problems or back injury.

Anyone who depends on their hands or their intellectual work should not take the high risk of loss of earnings due to lengthy illnesses lightly. Yet with the growing range of product on offer, in addition to cost considerations the insured party must also weigh-up which health risks they are more likely to suffer from: Depression, stroke or the inability to use one’s hands? One clearly needs a modicum of good fortune to have chosen the correct insurance in the case of misfortune. therefore it is imperative to use professional advice for this process, ideally and independent advisor like an insurance broker.

Occupational Disability Insurance and its Alternatives
How can I effectively protect my ability to work? The options differ significantly in terms of service, contract conditions and contribution amounts. Even if each product group has special deficits – every person who lives from the income from their work should protect this.

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