Investment & Wealth
Disability Insurance
disability lawyer
Berufsunfähigkeit Anwalt: Comprehensive Protection for Your Legal Career
One in five lawyers becomes unable to work during their career, but many underestimate this risk. Find out how to secure your financial livelihood as a lawyer and which pitfalls you should avoid.
The topic in brief and concise terms
One in five lawyers becomes unable to work; mental illnesses are the most common cause.
The pension scheme often only provides benefits in cases of 100% occupational disability and surrender of the licence, while a private disability insurance does so from 50%.
Pay attention to important clauses such as the waiver of abstract/concrete referral and a beneficial reorganization clause.
Understanding the Risk of Occupational Disability for Lawyers
Many lawyers have a false sense of security regarding the risk of occupational disability. Statistics show that around one in five lawyers becomes occupationally disabled over the course of their career. The belief that desk work poses less risk is deceptive, as the high demands of the legal profession carry specific dangers. A private occupational disability insurance is thus a fundamental component of your provision. The average weekly working time for full-time lawyers is 50 hours. This high workload can lead to long-term health problems. It is important to understand and properly configure your occupational disability insurance.
The causes of occupational disability among lawyers are varied. Mental illnesses such as burnout or depression rank first as triggers, accounting for almost 30 percent. These are closely followed by diseases of the skeletal and muscular systems at about 19 percent, and cancer-related illnesses at approximately 19.3 percent. Even though lawyers often work in offices, the risk for certain illnesses, due to stress and predominantly sedentary activities, is actually increased. These figures highlight that solid coverage is essential to avoid financial ruin in a worst-case scenario. Therefore, engaging with the conditions of a disability insurance policy is crucial.
Versorgungswerk versus Private Disability Insurance: A Critical Analysis
Many lawyers rely on their professional pension scheme in the event of occupational disability. The pension scheme for lawyers generally only provides benefits in cases of 100% occupational disability and often only after the lawyer's license has been surrendered. In the pension scheme for lawyers in North Rhine-Westphalia, in 2022, only 294 out of 37,116 members received an occupational disability pension, which is less than one percent. These figures clearly highlight a significant coverage gap. In contrast, a private occupational disability insurance often provides benefits from 50% occupational disability. Moreover, the pension amount can be adjusted more flexibly. Another important point is the difference between occupational and incapacity for work, which many people are unaware of.
The benefits of the pension scheme are also often tied to strict conditions. For instance, in the North Rhine-Westphalia scheme, legal practice must be abandoned, and the ability to work as a lawyer must have dropped to less than three hours a day. The private occupational disability insurance offers much more flexible and individual solutions here. It allows you to secure the profession you last practiced and the associated standard of living without the need for a complete cessation of work. However, the definitions of benefits can vary, so a thorough examination of the policy, as outlined in § 172 VVG, is essential. A correct application for occupational disability is crucial.
Optimise important contract clauses for lawyers
When taking out occupational disability insurance for lawyers, the details in the contract are crucial. One of the most important clauses is the waiver of the abstract referral. This means the insurer cannot refer you to another profession that you could theoretically still perform, but examines the occupational disability based on your specific work as a lawyer. Many insurers even offer lawyers a waiver of the concrete referral. This means you could receive a disability pension while still working in another profession that corresponds to your previous social standing. This is a significant advantage over standard contracts.
For self-employed lawyers, the reorganization clause is of great importance. This regulates whether and under what conditions the insurer can require you to reorganize your practice to continue working. Ideally, the insurer should waive the examination of reorganization or tie it to very narrow and advantageous conditions for you. Pay attention to the following points regarding the reorganization clause:
The insurer waives the examination if you are an academic working less than ninety percent in commercial/organizational tasks.
The reorganization must be economically and operationally appropriate.
A significant capital expenditure for reorganization (e.g., more than one year's pension) should not be reasonable.
Your social standing must not deteriorate due to the reorganization.
Our expert tip: Some insurers offer special tariffs for lawyers with simplified health questions, which can facilitate access. A careful examination of the deadlines for reporting occupational disability is also important.
Determine the appropriate pension amount and duration
Determining the correct pension amount is a crucial factor in securing protection against occupational disability as a lawyer. It should at least cover your net income to maintain your accustomed standard of living. Consider not only your ongoing private expenses but also the health insurance contributions (which you will then have to bear in full) and the contributions to the pension scheme. For a lawyer with private health insurance and a net income of 8,000 euros per month, the requirement can quickly exceed this amount. A pension amount of 3,000 to 4,000 euros per month is appropriate for many lawyers.
The term of the contract should ideally last until the statutory retirement age, so at least until the age of 67. Pay attention to extension options in case the retirement age is legally raised. A premium dynamic of five percent and a benefit dynamic of three percent help to compensate for inflation and maintain the value of your pension in the long term. Our expert tip: For very high desired pensions, splitting between two insurers can be useful to avoid medical examinations or to have more flexible reinsurance options. Also, clarify who pays in the event of a claim and how the processes work.
Observe legal foundations and current case law
The legal basis for disability insurance is found in the Insurance Contract Act (VVG), particularly in paragraphs 172 to 177. § 172 paragraph 2 VVG defines when a disability is present: “A person is considered disabled if they can no longer perform their last occupation, as it was designed without health impairments, either wholly or partially, due to illness, injury, or more than age-related decline, and this is likely to be permanent.” The insurance conditions often specify this definition further by replacing “likely to be permanent” with a period of six months.
The case law continues to evolve in interpreting these norms. For instance, the Federal Court of Justice (BGH) has clarified in various rulings the requirements for the policyholder to demonstrate a disability and the insurer's obligation to provide benefits. A judgement from 14 July 2021 (Case No.: IV ZR 153/20) dealt with the precise timing of the insurance event. [.:153/20,ü] Our expert tip: Accurately documenting your own professional activities as a lawyer is crucial in the event of a claim. Provide detailed information on which specific tasks you perform and how many hours per week you dedicate to these tasks. In 2019, lawyers spent an average of 42 percent of their working hours on file handling and only eleven percent on court appointments.
Your next step towards optimal protection
Insurance against occupational disability is a complex yet indispensable topic for lawyers. A thorough analysis of one's own needs and a precise comparison of offers are essential. Do not rely solely on the pension fund; instead, establish a solid financial foundation with a private occupational disability insurance for worst-case scenarios. The average annual surplus of self-employed full-time lawyers was 94,000 euros in 2016, an income worth protecting.
At nextsure, we understand the specific requirements of lawyers and help you find the right protection. Our mission is to offer you tailored and easy-to-understand insurance solutions. Take advantage of our expertise for your security. Request your individual risk analysis now: have your insurance situation assessed for free and receive concrete suggestions for optimisation.
More useful links
Statista provides detailed statistics on the distribution of causes of occupational disability in Germany.
GDV (Gesamtverband der Deutschen Versicherungswirtschaft) delivers seven key facts about occupational disability insurance.
Deutsche Rentenversicherung explains the official definition of occupational disability from the perspective of the statutory pension insurance.
Bundesministerium für Arbeit und Soziales (BMAS) offers a definition of the term occupational disability in the pension glossary.
Statista shows the likelihood of becoming occupationally disabled before reaching the retirement age of 65.
Verbraucherzentrale provides comprehensive information on how to protect oneself against income loss due to occupational disability.
DAK-Gesundheit provides their current Health Report 2023, which contains relevant data on health issues.
FAQ
What are the most common causes of occupational disability among lawyers?
The most common causes are mental illnesses (such as burnout, depression) accounting for nearly 30 percent, followed by musculoskeletal disorders (approximately 19 percent) and cancer (around 19.3 percent). The high stress in the legal profession can increase the risk for certain illnesses.
At what degree of disability does a private occupational disability insurance for lawyers provide benefits?
Most private occupational disability insurances for lawyers provide benefits starting from a degree of 50 percent disability. This means, if you are unable to carry out your legal work due to health reasons at least 50 percent for at least the foreseeable duration of six months.
How high should the occupational disability pension for a lawyer be?
The pension should cover your net income to continue funding ongoing expenses, contributions to health insurance and the professional pension scheme, as well as private retirement provision. For many lawyers, a monthly pension between €3,000 and €4,000 is recommended.
What should be considered when answering health questions in the occupational disability application for lawyers?
Answer all health questions completely and truthfully. False statements can lead to the loss of insurance coverage. Seek information from doctors if uncertain. Some insurers offer rates with simplified health questions for lawyers. An anonymous risk inquiry is often worthwhile.
Does the professional pension scheme play a role in the private occupational disability pension?
Benefits from the professional pension scheme are generally not deducted from an already existing private occupational disability pension upon becoming disabled. However, when concluding a private occupational disability insurance, insurers may consider the theoretical benefits of the professional pension scheme when calculating the maximum insurable private occupational disability pension.
What advantages does a special occupational disability insurance for lawyers offer?
Special occupational disability insurance policies for lawyers can contain advantageous clauses, such as the waiver of specific referral or better reorganization regulations. Sometimes there are also simplified health checks. Since lawyers are often classified as a low-risk group, contributions can be comparatively inexpensive.
