Occupational Disability Insurance in Germany – 5 Best Offers in 2024

What is the most valuable asset you have? Your house? Your car? No. It is you. Your ability to earn money. Without it, you can’t pay for your house or your car. You also cannot feed your family anymore. In this article, we will talk about how to protect your income by having occupational disability insurance in Germany. We will explain what it is, how it works, who needs it, the cost, the different types, and some best tips. You will also find the 5 best offers for occupational disability insurance in Germany.

Short summary for the busy people

If you don’t have much time, here are the highlights of the 5 best offers of occupational disability insurance in Germany: 

Keep on reading for more details about each best offer of occupational disability insurance in Germany.

Disclaimer: Please be aware that this article is intended to provide you a brief overview of disability insurance in Germany. This blog is not an insurance broker platform and is not qualified to give you any financial advice according to German law. If you need more details and specific advice on your personal situation, please refer to the insurance companies’ websites directly or contact an independent financial adviser.

What is occupational disability insurance in Germany?

Occupational disability insurance is called “Berufsunfähigkeitsversicherung” or “BU” in German. This is the insurance that protects you and your dependents financially in case you are not able to work due to disability.

If you are disabled and cannot work for longer than 6 months, you will receive a monthly pension from your occupational disability insurance in Germany. It doesn’t matter how much you earn before you are disabled. The amount of the monthly pension is stated in your disability insurance policy. 

You will receive this monthly pension (also called BU-Rente) for as long as you are disabled and until an agreed age specified in your contract. The reasons for disability include accidents or health problems. What kind of illness you have is irrelevant (as long as it is not excluded in your contract, e.g. pre-existing health conditions). Even mental illness such as burnout is included.

Read also: Making a Will in Germany – Why I Did It Already in My 30s

Who needs occupational disability insurance in Germany?

In general, the following groups of people should consider taking out an occupational disability insurance policy in Germany:

• Employees who depend on their income for living
• Young professionals: insurance premium is likely lower for them due to their young ages and good health condition
• Self-employed people who do not pay into the public pension system. Check here for more details about what type of disability insurance is suitable for self-employed people.

Unless you have a lot of savings that you can survive without working, it is good to have some form of income protection insurance in Germany such as occupational disability insurance. 

With occupational disability insurance, you don’t have to force yourself to change a profession in case you become disabled. It usually offers worldwide coverage as well. So, it can protect you and your family financially in case something happens to you.

Occupational disability insurance in Germany is a very comprehensive form of income protection for you. However, it is also not cheap. It definitely makes sense for most people to get one. The question is more about if you can afford it and if you want to pay the money for getting one. 

Read also:

• Liability Insurance in Germany – Compare the Top 5
• Best Home Contents Insurance in Germany – Compare the Top 5

How does occupational disability insurance work in Germany?

Occupational disability insurance in Germany protects your financial stability. There are a few important elements in the insurance contract:

The definition of disability

Different disability insurance contracts in Germany may define disability differently. For example, some insurance contracts only pay the monthly pension if you are disabled and not able to work in any type of job. 

Some other insurance contracts in Germany define you as disabled already when you cannot work in your own profession. So, it is very important to read the fine print and understand when you are eligible to receive the monthly pension.

Note that occupational disability insurance in Germany always insures your last profession. Many insurance providers will pay you if you can show a doctor’s proof that you are at least 50% disabled for at least 6 months. It means that you cannot exercise at least 50% of your current job duties anymore.

The price

After getting your occupational disability insurance in Germany, you will have to pay the premium monthly. The premium varies based on different factors such as your profession, your health, the monthly pension amount, the insurance coverage, the length of your contract, etc.

The monthly pension amount

You will get a monthly pension from the occupational disability insurance in Germany when you are disabled for a longer time. You have to choose a monthly pension amount when you first get your disability insurance policy. 

The duration of your monthly pension

When you get your occupational disability insurance in Germany, you will also have to specify the length of your contract. For example, until you are 67 years old. In case you are disabled when you are 50, you will receive the monthly pension until you are 67.

How much does occupational disability insurance cost in Germany?

The premium of an occupational disability insurance policy varies based on the below factors:

Your job

Different jobs are classified into different risk groups. If you are an office worker, you are in the lowest risk group, meaning a cheaper premium. The premium is more expensive for physical workers because statistically, they are less likely to be able to work until their retirement age. 

Note that the insurance provider only looks at your current job when you sign the contract. If you change a profession in the future, it will not affect your premium.

Your health

If you have any pre-existing medical conditions, you may have to pay a high insurance premium.

Your age

The premium is cheaper when you start the contract earlier. Because when you are young and healthy, it is less risky for the insurance provider.

For example, you can pay one-third more premium costs if you start your occupational disability insurance when you are 35 instead of 26 years old.

Your monthly pension amount

This is the amount you can receive per month in case you are disabled. The higher the pension amount, the higher the insurance premium.

The length of your insurance contract

The longer the contract period, the higher the insurance premium. It is because the chance that you become disabled increases with age and you are insuring for a longer period.

Your hobbies

In case you have risky hobbies such as skydiving, your premium will be more expensive. Note that the insurance provider only looks at your hobbies when you sign up for the insurance. If you develop a new risky hobby in the future, it will not affect the premium.

Combine with any supplementary insurance

In some cases, it is possible to get occupational disability insurance together with other supplementary insurance in Germany such as long-term care insurance or term life insurance. The premium may differ depending on if you take out other insurances as well.

Read also: Best Life insurance Germany – Top 4 Comparison

Individual insurance or group insurance

Sometimes, you may be able to get occupational disability insurance via your employer in Germany. It can be cheaper to do so because your employer can purchase the insurance for more people at the same time. 

The drawback with group insurance is that you will likely not be able to customize the disability insurance based on your need.

An example of the cost

Let’s look at an example of an office worker and a craftsman (who does not in an office).

Source: WirtschaftsWoche, 2023.

Now, consider the average net salary for an office worker and a craftsman. The office worker is paying about 1% of his average net salary for the insurance premium. But the craftsman is paying about 5%! That is why it is much easier to find an affordable disability insurance policy for people who work in low-risk jobs.

Read also: Salary in Germany: Are you getting paid enough?

5 Best offers for occupational disability insurance in Germany 

Firstly, there is no best occupational disability insurance provider in Germany. It is because everything depends on your individual need. For example, your age, your health situation, your desired flexibility, etc. The best occupational disability insurance contract for one person may not be the best for another person in Germany. 

We picked the below best occupational disability insurance in Germany based on our personal experience, online review, and in-depth research. We do not provide a complete market overview. Note that the data in this article is accurate as of the date when this article is written and is subject to change any time in the future.

Now, if you are looking for the best occupational disability insurance for yourself in Germany, take a look at the below 5 offers.

Disclosure: If you click the below links from the insurance companies and make a purchase, we will receive a small commission at no additional cost to you.

1. Getsurance

Getsurance is under the German insurance company called “Nürnberger Versicherung“, which is one of the leading insurance companies operating in Germany and Austria. 

Nürnberger Versicherung was founded in 1884. So, it has more than 130 years of insurance experience. The company also supports sustainability initiatives, such as environmental protection.

With other occupational disability insurance providers, it usually takes weeks until you get a decision because of the risk assessment. You will usually have to fill in a long questionnaire and submit doctor’s reports. 

With Getsurance, everything is done online and completely anonymous. There are only a few health questions and they are easy to answer. You will know your application result in just a few minutes.

If you want to save money, you can also exclude psychological illness. This will make your premium much cheaper.

Some highlights:

• Online application and no paperwork
• Know your application result in just a few minutes
• Best price guarantee: you can get your money back if you find a cheaper offer from another insurance provider
• You can include psychological illness optionally
• Only need to answer a few health questions anonymously
• Get the first assessment 5 days after applying for a disability pension
• Your monthly pension will be paid retrospectively if you are defined as disabled
• Monthly cancellable contract
• You can pause your contract for up to 12 months 

Application process

I have run through the application process at Getsurance and it was really simple. Just enter some basic information such as your age, desired monthly pension amount, etc. Answer a few health questions with yes or no. And you can see the price directly. It all just takes a few minutes and is completely anonymous. Not even your name or email address is needed. So, no risk. Try it out yourself!

Get occupational disability insurance from Getsurance now!

2. AXA

AXA was founded in 1816. It is a very big multinational insurance company with a headquarter in Paris, France. It is one of the largest insurance companies in Germany with worldwide operations in Europe, North America, Asia, etc.

AXA offers 3 different plans: basic (S), good (M), and premium (L).

Some highlights:

• Online application in less than 9 minutes
• Fast and anonymous health assessment
• 3 different plans: S, M, and L
• Premium starts from 15.76 EUR per month*
• Your monthly pension will be paid retrospectively if you are defined as disabled in the M and L plans
• With the L plan, You also get paid if you are sick (but not disabled) for 6 months or longer
• Get application result for disability pension in 7 days
• You are free to choose your doctor to assess your disability
• You may get a monthly pension for up to 24 months in some special situations such as constant wheelchair use, complete hearing loss, or blindness.
• Post-insurance guarantee and dynamic contribution are possible
• Part-time job people can get paid with a monthly pension if they are disabled for up to 3 hours per day (M and L plans)

Application process

I have run through the AXA application process. It has more questions compared to Getsurance (not just yes or no questions). But it is still quite straightforward. I finished the process in 10 minutes and saw the price and the application result. Everything is anonymous and online. No name or email address is needed.

Get occupational disability insurance from AXA now!

*Price based on a 25 years old engineer employee with a 1,000 EUR monthly pension. Contract until 60 years old.

3. Swiss Life

The Swiss Life Group was founded in 1857 with a headquarter in Zurich, Switzerland. It is the largest life insurance company in Switzerland and one of the leading comprehensive financial service providers in Europe. Swiss Life operates internationally in Europe and Asia.

Some highlights:

• Premium starting from 26.16 EUR per month*
• Worldwide coverage. You are also covered during your vacation or leisure time.
• Possible to have a cheaper premium if you change to a lower risk job
• If you apply for the disability monthly pension, you can do so via a quick telephone interview instead of a comprehensive questionnaire with a long processing time
• Post-insurance guarantee, dynamic contribution, and performance dynamics are possible
• You can get a monthly disability pension for 12 months if you have one of the defined serious illnesses, e.g. cancer or heart attack.
• You can reduce your premium to 5 EUR per month for up to 36 months when still insuring with 70% of your monthly pension amount. (e.g. during parental leave)
• Part-time job people can get paid with a monthly pension if they are disabled for up to 3 hours per day.
• Your contract can be extended for up to 5 years if the legal retirement age increases in Germany
• Rehabilitation service to go back to work sooner after being disabled (up to 2,000 EUR)

Application process

You can get a quick assessment of how much the premium will be. Just enter your age, job, desired monthly pension amount, and the contract length on the website.

If you want to move forward, you will need to fill out a contact form. Then, you can have a non-binding call/meeting with the expert from Swiss Life with whom you can consult individually.

Get occupational disability insurance from Swiss Life now!

*Price based on a 20-year-old non-smoking female full-time office employee with a 1,000 EUR monthly pension. Contract until 65 years old.

4. Hannoversche 

Hannoversche is a German insurance company that was founded in 1875, with a headquarter in Hanover, Germany. Hannoversche belongs to the VHV Group, which is one of the twenty most important insurance companies in Germany. VHV Group has operations in Europe, the Middle East, and East Asia.

Hannoversche offers 3 different plans: Basic, Plus, and Exclusive.

Some highlights:

• Online application
• 3 different plans: Basic, Plus, and Exclusive
• Worldwide coverage. You are also covered during your vacation or leisure time.
• Family discount if you live with your partner and underage children in the same household
• A post-insurance guarantee and dynamic contribution are possible.
• Flexibility: you can pause or defer your payment fully or partially for up to 24 months (e.g. during parental leave)
• Possible to remove coverage exclusion due to pre-existing medical conditions if your health improves in the future.
• Emergency aid in the amount of 3 months’ pension after an accident-related occupational disability (on top of the normal monthly disability pension)
• Self-employed people can get up to 30k EUR reorganization help if necessary, in case of disability
• With the Plus and Exclusive plans, you also get paid for up to 18 months if you are sick but not disabled for 6 months or longer
• With the Exclusive plan, you can get financial aid in the amount of a 6-month pension if you have one of the defined serious illnesses, e.g. cancer or heart attack.

Application process

By answering a few basic questions anonymously, you can have an assessment in a few minutes around how much it will cost for getting an occupational disability insurance policy at Hannoversche.

You can apply for the occupation disability insurance online directly. Before getting to the health questionnaire, you will have to fill in your email address and telephone number though. This is so that Hannoversche can contact you for a consulting session when needed.

After going through the health questionnaire, you will know immediately if you are eligible to get the disability insurance contract or if more documents are needed.

Get occupational disability insurance from Hannoversche now!

5. Feather

Feather was found in 2018. It also offers occupational disability insurance in Germany and it provides English services. Feather is digital, easy to use, and has no paperwork.

Some highlights:

• Online application
• Monthly cancellable
• Worldwide coverage
• English service
• Starts from 20 Euro per month

Get occupational disability insurance from Feather now!

Get free professional help in English

Looking for occupational disability insurance in Germany can be overwhelming, especially if you do not speak German. Even if you do, it is hard to understand all the small details and know all the financial implications.

If you prefer to get professional advice before buying your insurance, I can highly recommend joining a free English online seminar. The seminar is hosted by financial advisers from Swiss Life Select, one of the largest German financial advisory companies.

By the way, we bought all our insurances via our financial adviser from Swiss Life Select. Our financial adviser does not work for a specific insurance company. Instead, he compares the best offers in the market and gives us independent advice. Besides, he speaks excellent English, which is perfect for expats like me.

You will learn everything you need to know about insurance in Germany in the online seminar. If you want, you can also book a 1:1 meeting with my financial adviser to get a free personal consultation.

It is also good to know that in many cases, you can claim tax on the amount you pay for your insurance in Germany. So, the cost is actually less than what you think.

Read also:

• Tax Return in Germany – Guide for Expats
• 11 Best Tax Return Software Germany – Suitable for Anyone

4 Different types of disability insurance in Germany

There are different types of disability insurance in Germany. Below are the common types.

1. Occupational disability insurance (Berufsunfähigkeitsversicherung)

• This is the insurance we mainly talk about in this article.
• It is the most expensive type of disability insurance.
• You get paid if you cannot work 50% in your profession for at least 6 months.
• Your disability can be caused by injury or sickness.
• You can get a monthly pension.
  
  Pros:
  – A comprehensive and all-round solution for many people.
  
  Cons:
  – Expensive.
  – Relatively difficult to define disability.

2. Disability pension insurance (Erwerbsunfähigkeitsversicherung)

• It is cheaper than occupational disability insurance.
• You get paid if you cannot work for more than 3 hours a day in any kind of job for at least 6 months.
• You can get a monthly pension.
• Your disability can be caused by injury or sickness.
  
  Pro:
  – A good alternative if you cannot get occupational disability insurance or if it is too expensive to have one.
  
  Cons:
  – Relatively difficult to define disability.
  – You may be forced to change your profession following your disability.

3. Dread disease insurance (Dread-Disease-Versicherung)

• You get paid in case you get any of the 40+ serious diseases, such as cancer, heart attack, or stroke.
• A lump sum (instead of a monthly pension) will be paid.
• You still get paid even if you can still work.
  
  Pros:
  – You have access to a large sum of money instantly and can use it for any treatment cost if needed.
  – Relatively easy to define if you are eligible to receive the benefits.
  
  

  Cons:
  – Your money can run out if you cannot work for a longer period.

4. Basic capacities insurance (Grundfähigkeitsversicherung)

• You get paid if you lose basic human capacities such as talking, seeing, or using your hands or feet.
• You get paid even if you can still work.
• You can get either a lump sum or a monthly pension.
  
  Pros:
  – Relatively easy to define if you are eligible to receive the benefits.
  
  

  Cons:
  – You can only get paid if you are seriously handicapped.

How likely can you become disabled?

Many people underestimate the risk of occupational disability. According to statistics, one out of four people in Germany became disabled during their working life.

Your ability to work is your most valuable asset. Why? Imagine your gross salary is 4,000 EUR per month and you are 30 years old. Until you retire at 67 years old, you still have to work for 37 years. So, you will still earn almost 1.8 million EUR in your working life. 

And this has not included any potential salary increase in the future. Your ability to earn is probably even more valuable than your house! You probably have insurance to protect your house. Getting occupational disability insurance in Germany is the same thing you should do to protect your ability to earn money.

Read also: 

• Buying a House in Germany – As a Foreigner
• Mortgage in Germany – English Guide (Plus 6 Best Tips!)

What is causing occupational disability in Germany?

If you work in an office, you may think that you cannot be occupationally disabled as your job is not so physical. Yes. Indeed, the chance for you to have physical injuries or health problems due to your job is lower than a physically demanding job such as a craftsman.

However, you can be occupationally disabled not only because of your work but also during your leisure time, e.g. a bike accident. Besides, there is an increasing number of people who became occupationally disabled because of mental illness. 

If your job is too stressful, you can have burnout. People can also have psychological illnesses such as depression due to personal problems.

In fact, psychological illness is the most popular cause of occupational disability in Germany. And accidents only account for 7.6% of the reasons causing disability. 

Source: Morgen & Morgen, 2023

Many young people in Germany do not want to get occupational disability insurance because they don’t think they need one. Unfortunately, nobody is immune from accidents or diseases. Occupational disability can happen to both office workers and physical workers. 

Occupational disability insurance in Germany can help you to maintain your usual living standard in case of disability. You can also have enough money to pay for any additional treatment costs if needed.

Won’t you get money from the government if you are occupationally disabled in Germany?

The good news is that you may be able to get a disability pension from the government if you are disabled in Germany. This is called a reduced earning capacity pension (Er­werbs­min­de­rungs­ren­te). However, there are a lot of drawbacks to this pension:

• To qualify, you have to pay the public pension in Germany for at least 5 years.
• You have to pay into the public pension in Germany for at least 36 months in the last 5 years.
• The monthly pension amount is very little (less than 1,000 EUR per month on average)
• The definition of disability means that you cannot work for more than 3 hours in any kind of job.
• It is difficult to apply for the pension successfully: 42% of the application has been rejected. 

In case you are self-employed or a freelancer, you won’t get any pension from the government unless you have contributed to the public welfare system. And this seldom happens.

As you can see, you cannot rely on the government in case you are disabled. In that case, you will have to rely on your savings or family support, which is not ideal. The best protection would be to have occupational disability insurance in Germany.

Being sick vs. being disabled

Sick leave in Germany

If you have worked for at least 4 weeks before you are sick, you can have up to 6 weeks of continuous sick leave in Germany (fully paid by your employer). 

If you are still sick after 6 weeks, you will receive sickness benefits from your public health insurance called Krankengeld. This is about 70% of your gross salary, with a maximum of 90% of your net salary. You can receive sickness benefits for up to 78 weeks in 3 years for the same illness.

For more details, check out this: Sick Leave In Germany – Everything you need to know

The difference between being sick or being disabled

Let’s say you break your arms during your skiing trip. You cannot work anymore, but you are expected to be recovered after a few weeks. In this case, you cannot work temporarily. So, you are “Arbeitsunfähig“. You will be on sick leave and receive sickness benefits.

Let’s say you have a more serious injury. You are not expected to be recovered within 6 months. Even if you recover, you probably cannot exercise at least 50% of your current job duties. In that case, you are not sick anymore, you are disabled.

It can usually take some time to determine if you are disabled or just sick. This need to be assessed by both your insurance provider and your doctor. Your public health insurance will stop paying you sickness benefits once you are defined as disabled rather than just sick.

Read also: Private vs Public Health Insurance: What is Better for Expats in Germany?

You can face financial ruin

If you are disabled and without occupational disability insurance in Germany, you can face financial ruin. When you have no more salary, you still have to pay for fixed costs such as rent and other insurance.

So, it is important to have income protection in Germany. The occupational disability insurance helps to pay you when your health insurance in Germany stops paying you the sickness benefit. It helps to protect you and your loved ones in case you cannot work anymore.

Applying for occupational disability insurance in Germany

To apply for occupational disability insurance in Germany, you will need to answer a lot of questions. These include your hobbies, current job, and also any pre-existing health conditions.

I remember that it took me quite some time to fill in these questions when I applied for my occupational disability insurance in Germany. One of the problems was that I had stayed in a hospital for a few days in the last 5 years. So, I had to communicate with my doctor to provide proof that my health problem has been resolved.

Make sure you answer the questionnaire correctly!

You need to take this questionnaire seriously. In case you give wrong or incomplete answers (no matter if it is intentional or not), your insurance provider can reject paying your monthly pension when you make a claim in the future. So, you don’t only lose your insurance protection, but also all the premiums you have paid throughout the years!

Pre-existing health conditions will affect your application

If you have some serious sickness, the insurance provider may reject your application. For some other pre-existing conditions, the insurance provider may increase your premium or exclude the relating coverage. If you smoke or have a high BMI, you may also need to pay a higher premium.

Insurance providers will share information with each other

Note that if your application is rejected by one insurance provider, you will have a lower chance to get occupational disability insurance from another provider in Germany. The reason is that the different insurance providers share information with each other. This includes any negative information about you or previous application rejection.

Occupational disability insurance in Germany can be adjusted to inflation

The inflation in Germany was very high in the last years. Let’s say you have an occupational disability insurance policy that will pay you a monthly pension of 1,000 EUR if you are disabled. The 1,000 EUR may be enough for now. But it is probably not enough 10 years later.

It is because things get more expensive due to inflation. The purchasing power of your money will decrease. Because of that, you should adjust the monthly pension amount in the future and make sure that the amount still can cover your cost of living in Germany.

Note that inflation is only one reason. There are other reasons during your course of life that you may want to adjust your monthly pension amount. For example, a change of personal circumstances such as having a new kid means that your living expense will be higher.

In general, there are three ways for you to adjust your monthly pension amount: post-insurance guarantee, dynamic contribution, and performance dynamics.

Post-insurance guarantee

This is called “Nach­ver­si­che­rungs­ga­ran­tie” in German. With this guarantee, your insurance provider lets you increase your monthly pension in case of special events such as marriage, having a new kid, purchasing a property, etc. 

To increase your monthly pension, you will need to pay a higher premium correspondingly. Note that it will be more expensive for you to use the post-insurance guarantee vs. if you have arranged a higher monthly pension amount at the beginning of your insurance contract.

The reason is that the premium is based on your age. The older you are, the more expensive it is to increase your monthly pension. The good thing is that you don’t have to answer a new health questionnaire again.

Also, pay attention that there may be limitations to the post-insurance guarantee. For example, there may be a maximum monthly pension amount that you can increase. Or there is a maximum age (45 or 50) after which you cannot increase your monthly pension amount anymore.

If you are still young when you apply for occupational disability insurance in Germany, make sure to find a contract with a post-insurance guarantee so that you can stay flexible in the future.

Dynamic contribution

This is called “Beitragsdynamik“. This is what I personally have in my occupational disability insurance contract in Germany. How it works is that your premium will increase by a fixed percentage every year, e.g. 3%. And of course, your monthly pension will also increase correspondingly (by less than 3% though as you are getting older). 

Similar to the post-insurance guarantee, you do not need to fill in a new health questionnaire. However, it will become more and more expensive to increase your monthly pension because the price is tied to your age. So, when you are older (after 45 years old), you should review it to see if it still makes sense to increase your premium.

You will get a letter from your insurance provider every year, stating that your premium will be increased by 3%. Note that you do not have to agree to this. You can always reject the increase if you want your premium to stay the same as last year (e.g. if it becomes too expensive for you).

But if you reject the increase 3 times in a row, you will lose the right to increase your monthly pension in the future. Therefore, it is a good practice to increase the premium at least once in 3 years.

Dynamic contribution is a good way to adjust your monthly pension against inflation. You can increase your monthly pension amount steadily and stay flexible.

Performance dynamics

This is called “Leistungsdynamik” in German. This is an option to increase your monthly pension amount after you are disabled. This is more useful if you become disabled at a young age.

To have this option in your contract, you will have to pay a higher premium. Note that you should not opt for a lower monthly pension amount because you have the performance dynamics option in your contract. It is always better to have a sufficient monthly pension amount and use the performance dynamics option to adjust for inflation.

Can you save money instead of getting occupational disability insurance in Germany?

According to statistics, the people who become disabled in Germany are at an average age of 47 years old. Without occupational disability insurance in Germany. these people will need to save enough money for the 20 years until their retirement age of 67 years old.

Now, assume they need 1,500 EUR for living expenses per month. They will have to save up 360k EUR to maintain their living standard when they cannot work anymore. And this has not considered any inflation adjustment.

Depending on your salary and investment, you may be able to save up money instead of getting occupational disability insurance in Germany. But if you earn a good salary, paying a little part of it per month to get disability insurance gives you better protection in case you are disabled.

Read also: 

• Invest in Germany to Make Money – English Guide
• Real Estate Investment Germany – 3 Ways To Invest

What type of disability insurance is the best for self-employed people in Germany?

What is a reorganization clause?

If you are self-employed in Germany, you should pay attention to the fine print when getting an occupational disability insurance contract. Sometimes, there is a reorganization clause (Umorganisationsklausel) stated in the contract. 

It means that the insurance provider can check the work process of the self-employed person to see if it is possible to reorganize the workflow. Since the self-employed person needs to be 50% disabled in his job, the goal of the reorganization is to reduce this percentage to less than 50% (so that the insurance provider does not have to pay).

Sometimes, there is a conflict between the insurance provider and the self-employed person about whether the reorganization suggested by the insurance provider is reasonable.

Try to avoid a contract with a reorganization clause

To avoid any potential issues, it may be better for self-employed people to get occupational disability insurance that has no reorganization clause (or at least the clause needs to be clearly defined). If that is not possible, it may be easier for self-employed people to get disability pension insurance or dread disease insurance instead.

Getting disability pension insurance instead

As a reminder, to get paid by an occupational disability insurance policy, you need to be disabled in your current job. For disability pension insurance, you need to be disabled in any kind of job (so, more seriously disabled).

Due to the reorganization clause, it may be hard to make the occupational disability insurance provider pay unless the self-employed person is so disabled that he cannot work anymore. It is because the insurance provider can always suggest the self-employed person hire external help instead of working by himself. 

But if the self-employed person is so disabled, a disability pension insurance policy will also pay. And the premium of disability pension insurance is much cheaper than that of occupational disability insurance.

Getting dread disease insurance instead

In case the self-employed person is seriously ill (e.g. cancer), it does not necessarily mean that he cannot work in his business anymore. 

If he does not die and recovers from cancer, he may not want to give up his business. In that case, it may be better to have dread disease insurance instead. 

He can get a big lump sum payment if he has cancer. He can then use this money for medical treatment and continue to run his business by hiring external help.

Should students or trainees also get occupational disability insurance in Germany?

Even though the chance of student and trainees becoming disabled are low because of their young ages, they are not immune to illness and injury.

If they can afford it, they should get an occupational disability insurance policy at a young age. The reasons are below:

Pre-existing conditions affect premium in the future

If they are sick, it can become difficult or expensive to get a disability insurance policy in the future. So, they should get one when they are still healthy.

Not eligible for public pension

If a student is disabled, he will not get a reduced earning capacity pension from the government because he has not paid into the public pension plan for 5 years yet.

That’s why it may make sense to get occupational disability insurance in Germany.

Students are classified as a low-risk group

The disability insurance premium varies greatly based on the profession. When a student gets a disability insurance policy, he will be classified into a low-risk group and pay a cheap premium.

It doesn’t matter if he works in a high-risk job in the future. He can still keep his disability insurance and continue with the cheap premium.

Cheap premium

When they are young and healthy, the premium will be much cheaper.

What is not insured by the occupational disability insurance in Germany?

You may not get benefits from your disability insurance in the following situations:

Certain jobs

If you work in a very high-risk job such as a pilot, it may be too expensive for you to get occupational disability insurance in Germany. Or you may not be able to get a contract at all.

Cannot meet the definition of disability

If your disability is less than 50%, you will not get paid by your occupational disability insurance in Germany.

War or terrorism

Your insurance contract may exclude disability caused by war or terrorism.

Becoming disabled on purpose

If you cut your arm and leg on purpose to become disabled, your insurance will not pay. Pay attention also to the fine print in your insurance contract. While some insurance providers pay as long as you are disabled, some other insurance providers may not pay for a disability that is caused by your own fault. For example, if you have an accident because you cross the road at the red traffic light.

Pre-existing medical conditions

If you have existing health issues, you may still be able to get an occupational disability insurance policy in Germany by paying a higher premium. However, sometimes the insurance providers may exclude the benefit if your disability is caused by your existing conditions. If your health is too bad, you may not get a policy at all.

Take an example of my husband. He has very bad eyesight. So, he is almost blind without his glasses. In this case, he still gets his occupational disability insurance policy in Germany. However, the insurance provider will not pay in case he is disabled in his current job in the future because of his eyesight. 

8 Tips on getting your occupational disability insurance in Germany

1. Get your disability insurance early

It is cheaper to get your disability insurance when you are still young and healthy. Students also benefit from getting occupational disability insurance, especially if they want to have a risky job in the future.

It is also better to get your insurance concluded before the year-end. Some disability insurance providers count you one year older once after the year-end (regardless of your actual birthday). 

Some providers also let you date back the start date of your insurance contract to before your birthday or before the year-end. This way you can still benefit from a lower premium even if you have just missed the deadline.

2. Choose your insurance provider carefully

Occupational disability insurance is a long-term contract. Your contract may last another 30 years until you are retired. So, it is important to choose a good insurance provider. Read the review of the insurance providers to see if they have a good claiming process.

3. Pay attention to the difference between net- and gross premium

Net premium is called “Zahlbeitrag” in German. It is the monthly premium you pay to your occupational disability insurance provider in Germany. 

On the other hand, the gross premium is called “Bruttobeitrag” in German. It is the maximum amount your insurance provider can increase your premium to.

Even if you are paying a low net premium now, your insurance provider has the right to increase your premium up to the gross premium amount. This can be the case if the insurance providers are too optimistic when they calculate the net premium. Some providers may want to attract more new customers by offering a low net premium but reserve the right to increase the premium in the future.

So, it is important to not just look at the net premium amount, but also pay attention to the gross premium amount. The best is to have an offer where the net premium equals the gross premium (or at least very similar). You won’t want to get a cheap deal now and only realize that the insurance provider doubles the premium a few years later.

4. Calculate your monthly pension amount carefully

Since occupational disability insurance is relatively expensive in Germany, you should calculate how much money you really need in case you are disabled.

Think about how much you will need to cover your living expenses each month. It is important to consider all the fixed costs such as rent, medication, other insurances, etc. The goal is to maintain your living standard as much as possible in case you are disabled.

Don’t forget that you will have to pay all the social contributions by yourself when you are disabled. There are no contributions by your employer anymore. You also need to pay into your pension so that you have enough money to live after you retire. 

Of course, you will need less monthly pension if you have more savings. You will have to regularly review your monthly pension amount based on your personal situation to see if it still makes sense.

Also, get an occupational disability insurance policy with an option to increase your monthly pension amount in the future. This can be a post-insurance guarantee, dynamic contribution, or performance dynamics. This way you can stay flexible whatever happens in the future.

5. The duration of your occupational disability insurance contract

The retirement age in Germany is 67 years old. If possible, you should have your occupational disability insurance coverage until you are 67. Your premium will be more expensive for a longer contract. But it protects you until you can start getting your retirement pension.

6. Fill in the health questionnaire anonymously

Occupational disability insurance providers in Germany will share information with each other. In case you apply to one provider and the application is rejected due to your pre-existing health condition, you may get a rejection from other providers as well because they see that you have an application rejection previously.

So, the best would be to answer your health questionnaire anonymously at the beginning. This is just to see if you are eligible to get an occupational disability insurance contract at all.

Some insurance providers have an anonymous process for you to enter your health information. This is so that you can know first if you can get a contract without the risk of getting an official rejection.

7. Avoid contracts with a waiting period

Pay attention to the fine print of your occupational disability insurance contract in Germany. If you are disabled, it usually takes some time until your disability is defined. 

In that case, when should your disability insurance provider start paying you the monthly pension? If your disability is defined at a later time, will your insurance provider pay you back your pension retrospectively?

Some occupational disability insurance contracts even include a waiting period (Karenzzeit). During this waiting period, you won’t get paid by your insurance provider after you are disabled (e.g. 6 months). Even though your premium will be cheaper if you include a waiting period, you will face a higher financial risk if you are disabled.

Make sure you read the fine print and understand when you will get paid in case you are disabled.

8. Get legal insurance (and other necessary insurances) in Germany

If you do not have legal insurance in Germany yet, you should get one. You will be relieved in case you have conflicts with your employer, your neighbors, and also your insurance provider in the future. Unfortunately, there are often conflicts between the insuree and the occupational disability insurance provider when disability happens. 

Take the example of my father-in-law. He had a car accident in his 50s and was disabled afterward. His back hurt so badly that he could not sit in his office anymore. Since he could not go to work, he was forced to be in early retirement. 

Luckily, he had both accident insurance and legal insurance in Germany. It took quite some time until his disability was defined. During this time, he got paid by his accident insurance with a lump sum. The good thing about having accident insurance was that accidents were relatively easy to define and my father-in-law got paid quite quickly. He could use this money for additional medical treatment costs such as acupuncture. 

Then, he had a conflict with his occupational disability insurance provider in Germany. Of course, his insurance provider tried not to pay him. They claimed that my father-in-law could still work somehow more than 50%.

The conflict ended up in court. My father-in-law won and got paid eventually. But it was a long and exhausting process. Luckily, his legal insurance helped and also paid for the legal costs.

Read also: 

• Legal Insurance Germany –  English Guide (+ 3 Best Offers)
• Insurance in Germany – Which one do you need?

Conclusion

I hope you know now more about occupational disability insurance in Germany. It is not a must-have insurance policy like health insurance or car insurance. But it is definitely a good-to-have insurance policy if you can afford it. Nobody is immune from accidents or illness. No matter if you are young or old. Occupational disability insurance in Germany can protect you and your loved ones against financial ruin in case of any unfortunate events.

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Disclaimer

Please be aware that this article is intended to provide you a brief overview of disability insurance in Germany. The information and tips in this article are based on personal experiences and thorough research.

This blog is not an insurance broker platform and this article does not represent professional advice. Before purchasing, you should read the fine print of the insurance policy to make sure you understand the details.

This blog is not qualified to give you any financial advice according to German law and we do not accept any form of liability resulting from reading this article. Our blog makes no guarantee as to the accuracy or timeliness of the information in this article.

If you need any more details or the latest information, please refer to the insurance companies’ websites directly. If you need personal insurance advice, please contact an independent financial adviser.

Do you have occupational disability insurance in Germany? Why or why not? What is the best occupational disability insurance provider for you in Germany? Leave a comment below and share your experience!