In addition to the important points already mentioned, there are other special contract components that you should consider when taking out disability insurance.
Agree on a contribution dynamic
If you insure € 2,000 BU pension today, then in 15 years’ time it will no longer be “worth” € 2,000 in terms of purchasing power. We owe this to inflation. It is therefore extremely important that you incorporate what is known as a contribution dynamic into your contract that compensates for inflation.
The dynamic contribution increases your insured occupational disability pension and, accordingly, your contribution by the agreed percentage. As a rule, 2-3% makes sense here if you want to balance out inflation well.
You can also contradict this dynamic contribution during the term, so that you suspend a year, for example. Please note, however, that some insurers completely remove this dynamic from the contract if you contradict too often in a row. This should be avoided at all costs.
Agree on a performance dynamic
The performance dynamic works in a similar way to the contribution dynamic. However, this does not refer to your insured BU pension during the term, but comes into effect at the moment when your BU pension is paid out because you are unable to work.
If, for example, you have agreed a performance dynamic of 1%, the paid out BU pension increases by 1% every year. This also serves to compensate for inflation.
Unlike the contribution dynamics, the benefits dynamics cost something. The higher the selected percentage, the higher your contribution to the disability insurance. This also makes sense, as the performance dynamic is nothing more than a guaranteed increase in your BU pension in the event of a benefit.
Note additional insurance guarantees
In the case of occupational disability insurance, there are usually event-related and non-event-related additional insurance guarantees. This gives you the opportunity to adjust your BU pension upwards without the insurer asking you health questions again.
When you take out your disability insurance, you should be aware of the options for additional insurance so that you can use them later if your situation requires it.
Event-related follow-up insurance guarantees:
- birth of a child
- House purchase
- bigger raise
- Change to self-employment
- among others
Non-event-related additional insurance guarantees:
- Increase in the BU pension after the 6th and 10th year of insurance
Follow-up insurance guarantees, especially non-event-related guarantees, differ from insurer to insurer. You should always use the Note deadlines , within which you can use an event-related subsequent insurance guarantee (usually within 6 months after the occurrence of the event). Mostly there are too Elevation Limits (e.g. € 2,500) up to which you can then increase your BU pension via a supplementary insurance guarantee.
No abstract references
The abstract reference is a term that still terrifies many. This means that despite being unable to work in the actual job, you can still be referred to another job. In the past, this was also quite possible because the insurers did not dispense with the abstract reference. Nowadays, however, this is the rule and every good insurer does without abstract references.
Choose a duration up to retirement age
The insurance and benefit duration of your disability insurance should definitely be applied for up to the current retirement age. For example, if you only take out BU insurance up to the age of 65, there will be a gap in coverage of 2 years. That may not sound like much at first, but if we take the € 2,000 from the above example again that you have as a monthly requirement, this would be € 48,000 that you have to “bridge” somehow. And again only very few will be able to do this.
Don’t be blinded by lower contributions
Unfortunately, some insurance brokers or online portals go there and reduce the final age from 67 to 65 years or even less in order to achieve a cheaper premium. Yes, it is correct, if you “steal” yourself at the end of a few years, then the fee actually becomes cheaper. But nobody asks why this is so.
And this is because, of course, your risk of becoming disabled increases with age and is highest between 50 and 67. In this way, you take your protection away in those years when the risk is highest!
So please don’t fall for this “sleight of hand” trick.
Forecast period and retrospective benefits
It is also important that your insurer estimates the shortest possible, so-called forecast period. The forecast period describes the length of time for which you will probably be at least unable to work. This period should be 6 months, but no longer. Because the longer this period, the more difficult it will be for you to get the BU service, as it is more difficult for the doctor, for example, to make a very long prognosis (of e.g. 12 months).
In addition, your BU insurer should also guarantee benefits retrospectively from the first day of disability. Of course, the examination of an occupational disability takes a certain amount of time. As soon as this is determined, you will get your BU pension paid out retrospectively.
It is not always possible to take out disability insurance. Be it that the contribution is too high for your own professional group or that there are already too many previous illnesses.
In such cases, it makes sense to look into the alternative to occupational disability insurance.
We have this here covered in a detailed article.
If you’ve read this far, you have probably realized that disability insurance is a very complex insurance product.
Unfortunately, it is not possible to find the right disability insurance from here with just a few clicks on the Internet. There are too many pitfalls for this, such as health questions, which are often answered too negligently and then in the end the insurer (rightly) does not pay.
So it is advisable to look for a competent insurance broker who you trust and who works the way you imagine.
If you are still looking for a BU expert, then you are very welcome to get one Online advice book with us (if there are currently available dates).
Here you can be sure that we will address all of the points mentioned in this article. However, we are happy to let our previous customers speak for us: