Occupational disability insurance

What is it?

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.

Many people find themselves in a dilemma: when they are young, they think “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?

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.

Who is it for?

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 by such various market players is mainly due to two things:

The state disability pension is rarely enough to maintain the standard of living. It is usually only about 32% of your income before taxes.

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

It is also worth noting that insurers’ refusal rates are low. This means that if no false information was provided when signing the contract, only the degree of disability is decisive. The degree is determined independently by doctors, so that insurers have very little scope to reject benefits.

Interesting & Useful things

Bund der Versicherten:


Stiftung Warentest:

Did you know?