Income Protection Insurance: Why it is crucial for your financial well-being and what you need to know
16 May 2025
10
Minutes
Katrin Straub
Managing Director at nextsure
One in four working people in Germany will become unable to work during the course of their career. Without private disability insurance, financial ruin often looms. Discover why this coverage is so important and how to find the right protection.
The topic in brief and concise terms
One in four workers becomes unable to work during their lifetime, but only about 29 percent have a private occupational disability insurance.
The statutory disability pension is usually not sufficient; a private occupational disability insurance covers about 80 percent of the net income. [4]
Early completion, honest health disclosures, and the waiver of abstract referrals are crucial for optimal protection. [1,4]
Understanding the Need for Disability Insurance: Facts and Figures
The risk of becoming unable to work is real and affects more people than expected. Statistics show that about one in four workers will become unable to work at least once in their working life. Despite this alarming figure, a study found that only about 29 percent of employed people in Germany have taken out occupational disability insurance. The average duration of an inability to work is around six years, which can lead to significant financial losses without protection. Mental illnesses are the most common cause of occupational disability, accounting for approximately 35 to 39 percent. The significance of occupational disability insurance can therefore hardly be overestimated. These figures illustrate how important private provision is to maintain one's standard of living.
Assessing the financial impact: How much does occupational disability insurance cost?
The cost of an occupational disability insurance varies significantly and depends on several factors. These include the age of entry, health status, occupation, desired pension level, and contract duration. For example, a young, healthy person in an office job can obtain solid coverage for under 50 euros per month. For physically demanding occupations or when taken out later, premiums can rise to 100 to 150 euros or more. [4] Our expert tip: Take out the insurance as early as possible to benefit from lower premiums. A recommended pension level is around 80 percent of net income. [4] With an occupational disability insurance calculator, you can get initial estimates. The investment in an occupational disability insurance is an investment in your financial security.
Target Groups in Focus: Who is the disability insurance indispensable for?
Basically, occupational disability insurance is advisable for anyone who relies on their work income. [4] However, it is particularly important for certain groups:
Career starters, students, and apprentices: They benefit from low premiums due to their young age and usually good health. [4] Early coverage lays the foundation for a worry-free future.
Self-employed and freelancers: They often do not qualify for statutory disability pensions and bear the full financial risk themselves. [4] Therefore, occupational disability insurance for the self-employed is essential.
Sole earners and families: If the main earner's income fails, it can quickly lead to financial hardship for the entire family.
People with high-risk occupations: Craftspeople or those in physically demanding jobs have a statistically higher risk of becoming unable to work.
The occupational disability insurance protects your income and thus your standard of living. This coverage is a central component of personal provision.
Legal protection versus private provision: Why the disability pension is not enough
Many rely on state support, but the statutory disability pension often offers only insufficient protection. Since a reform in 2001, the former occupational disability pension for those born after the first of January 1961 no longer exists in its previous form. [2] Instead, the German pension insurance now only checks whether any activity can be performed in the general labour market for at least three or six hours a day. [4] The learned profession and previous social standing play hardly any role. In 2023, the full disability pension amounted on average to about 1,059 Euro, while the partial disability pension was approximately 593 Euro. [4] This is usually not enough to maintain the standard of living. In addition, certain waiting periods must be met, such as 36 mandatory contributions in the last five years before the onset of the disability. [4] The difference from occupational disability is significant. A private occupational disability insurance is therefore indispensable to close this gap.
Explore alternatives: What options are there for disability insurance?
Not everyone receives an occupational disability insurance on acceptable terms, for example due to pre-existing conditions or a very high-risk profession. In such cases, alternatives can be considered, which usually do not offer equivalent protection: [1]
Incapacity insurance: Provides benefits if you can no longer engage in any gainful employment (often less than three hours a day).
Basic ability insurance: Pays out if certain fundamental abilities such as seeing, speaking, or walking are lost. [2] A comparison with occupational disability insurance shows significant differences.
Dread disease insurance: Provides a lump-sum payment upon the occurrence of certain serious illnesses.
Accident insurance: Pays out only in cases of disability caused by an accident.
Important to know: These alternatives often do not adequately cover mental illnesses, the most common cause of occupational disability. [1] They are rather to be seen as a last resort if full occupational disability insurance is not possible. What happens without insurance cover can be life-threatening. Therefore, consider carefully.
Planning Long-Term Security: The Importance of Income Protection
Protecting your ability to work is a fundamental aspect of financial life planning. Disability can affect anyone, regardless of age or profession. The average period of incapacity lasts six years, which can quickly lead to a debt trap without private provision. The statutory disability pension alone does not provide sufficient income protection in most cases. Consider that the value of your ability to work often amounts to several hundred thousand to over a million euros over a career. This value needs to be protected. A carefully chosen disability insurance is the best way to maintain financial independence in the event of a serious illness or accident. Plan your financial future and secure your most important asset: your ability to earn an income.
Request an individual risk analysis now: Have your insurance situation checked free of charge and receive specific optimisation suggestions.
More useful links
Deutsche Rentenversicherung offers statistics and reports on disability pensions over time.
Statistisches Bundesamt (Destatis) provides press releases with relevant statistical data.
Bundesministerium für Arbeit und Soziales (BMAS) offers a brochure on disability pensions.
Gesamtverband der Deutschen Versicherungswirtschaft (GDV) provides information on 7 facts about disability insurance.
Deutsche Rentenversicherung provides the 2023 insurance report with comprehensive data.
Statistisches Bundesamt (Destatis) offers information on the topic of social assistance.
Die Bundesregierung answers frequently asked questions (FAQ) about disability pensions.
FAQ
Brauche ich wirklich eine Berufsunfähigkeitsversicherung?
Ja, wenn Sie auf Ihr Arbeitseinkommen angewiesen sind, ist eine Berufsunfähigkeitsversicherung existenziell wichtig. Statistisch wird jeder Vierte berufsunfähig, und die gesetzliche Absicherung ist meist unzureichend.
Was kostet eine Berufsunfähigkeitsversicherung monatlich?
Die Kosten hängen von Alter, Beruf, Gesundheit, Rentenhöhe und Laufzeit ab. Junge, gesunde Büroangestellte zahlen oft unter 50 Euro, bei risikoreicheren Berufen oder späterem Einstieg können es 100 bis 150 Euro oder mehr sein. [4]
Welche Höhe sollte die Berufsunfähigkeitsrente haben?
Experten empfehlen, etwa 80 Prozent des aktuellen Nettoeinkommens als Berufsunfähigkeitsrente abzusichern, um den Lebensstandard halten zu können. [4]
Worauf muss ich beim Abschluss einer BU achten?
Wichtige Punkte sind: Verzicht auf abstrakte Verweisung, kurzer Prognosezeitraum (sechs Monate), Leistung ab 50 Prozent Berufsunfähigkeit, Nachversicherungsgarantien und eine Laufzeit bis zum Rentenalter. [1,4]
Was ist der Unterschied zur Erwerbsminderungsrente?
Die Berufsunfähigkeitsversicherung sichert Ihren konkreten Beruf ab. Die gesetzliche Erwerbsminderungsrente prüft nur, ob Sie irgendeine Tätigkeit am Arbeitsmarkt ausüben können und ist oft deutlich niedriger. [4]
Gibt es Alternativen zur Berufsunfähigkeitsversicherung?
Ja, es gibt Alternativen wie die Erwerbsunfähigkeits-, Grundfähigkeits- oder Dread-Disease-Versicherung. Diese bieten jedoch meist einen geringeren Schutz und decken oft psychische Erkrankungen nicht ab. [1,2]
