Basic Ability Insurance: Your financial shield in the event of losing essential abilities
18.04.25
5
Minutes
Katrin Straub
Managing Director at nextsure
The loss of a basic ability can change life overnight and lead to significant financial losses. Basic ability insurance provides important financial support in this case. Find out how this insurance works and for whom it is particularly suitable.
The topic in brief and concise terms
The basic ability insurance provides a monthly pension in the event of the loss of defined elementary abilities, regardless of occupational activity.
It is particularly an important protection option for manual workers, self-employed people and people with pre-existing conditions.
Look for clear definitions of the abilities, an adequate pension amount (approx. 80% of net income) and a guaranteed option to increase cover without medical evidence.
Understanding basic ability insurance: core protection in focus
The basic ability insurance (GFV) pays an agreed monthly pension. This happens if you lose one or more defined basic abilities.
These abilities are often divided into catalogues. Losing just one ability from the most important catalogue usually triggers a benefit.
Causes can be accidents, illnesses or a general decline in strength. Your occupation plays no role in the benefit. Many policies already pay if the impairment is expected to last six months.
The basic ability insurance as cover has been available on the German market since 2000.
This cover is especially worth considering for people in physically demanding occupations. Find out more about income protection through insurance.
Expanding the scope of cover: Which skills are specifically covered?
Insurers define insured basic abilities in so-called abilities catalogues. These are often divided into up to three categories.
Typical basic abilities in the first category include sight, speaking and the use of the hands.
Other catalogues include abilities such as walking, climbing stairs, hearing, sitting, kneeling and bending, or driving a car.
Pay close attention to the exact definition: for example, must it be possible to walk a distance of 400 metres without a break, or is it only 200 metres?
Some policies also cover the loss of the sense of balance or cognitive abilities. These include orientation and memory.
Mental health conditions such as severe depression or schizophrenia are included only in a few high-benefit policies.
The exact conditions under which an ability is deemed lost vary greatly. A comparison of the basic ability insurance vs. BU is therefore advisable.
Here is an example list of commonly insured basic abilities:
Sight (e.g. residual vision below five per cent in both eyes)
Speaking (e.g. no longer being able to utter intelligible words)
Hearing (e.g. deafness or severely impaired hearing)
Use of the hands (e.g. inability to open a bottle)
Walking (e.g. not being able to cover 400 metres without aids and a break)
Climbing stairs (e.g. inability to climb twelve steps without holding on)
Kneeling or bending
Driving a car (often as an optional add-on)
The precise design of these abilities catalogues is crucial for any later entitlement to benefits.
Practical examples explored: When and how does basic disability insurance pay out?
A tradesperson with severe arthritis in the hands can no longer carry out his precise tasks. He loses the ability to grip.
The basic ability insurance pays the agreed pension. This is because "gripping" is an insured ability. This applies even if, in theory, he could still work in an advisory capacity.
A photographer suffers vision loss to below five per cent. She can no longer carry out her profession.
Here too, the GFV pays out due to the loss of the basic ability "seeing". The claim to benefits arises regardless of whether the insured person can still work or not.
An IT consultant can no longer stand or climb stairs without pain after a slipped disc. Two insured basic abilities are affected.
The insurance pays as long as the limitation exists. This applies for a maximum until the agreed end of the contract. For self-employed people, the basic ability insurance can be an important form of cover.
Calculating costs: What charges should you expect?
The cost of basic skills insurance varies widely. It depends on several factors.
These include the age at entry, state of health, occupation, desired pension amount and the contract term.
A thirty-year-old office clerk pays around 48 to 55 euros for a monthly pension of 1,500 euros with basic cover. For premium tariffs, it can be 100 to 180 euros.
Young, healthy people in low-risk occupations can find tariffs from around 25 euros per month.
A self-employed roofer (40 years old) has to expect a monthly premium of 100 to 200 euros for a pension of 2,650 euros.
The recommended pension amount is around 75 percent of net income. A precise comparison of basic skills insurance policies is essential.
Factors influencing the premium amount:
Age at entry: Younger policyholders usually pay lower premiums.
State of health: Pre-existing conditions can lead to risk surcharges.
Occupation: Physically demanding jobs often have higher premiums.
Insured pension amount: A higher pension means higher premiums.
Contract term: Longer terms can affect the premiums.
Scope of insured abilities: More insured abilities or more generous definitions increase the price.
Additional modules: Options such as an incapacity-to-work clause or mental health modules cost extra.
A careful analysis of your own needs helps you find the right and affordable cover.
Tap into expert knowledge: keep an eye on the latest rulings and clauses
A ruling by the Federal Court of Justice (BGH) of 11 December 2024 (case no. IV ZR 498/21) sparked discussion.
The BGH stated that Section 177 of the VVG may not be applicable to basic ability insurance policies.
In theory, this could mean that insurers could give ordinary notice or limit benefits to a fixed term. So far, however, no insurer has attempted to apply this in practice.
Many experts and insurers continue to classify GFV as insurance of the life assurance type. This would preclude such termination.
It is important to carefully review the disadvantages and clauses of basic ability insurance. Look out for a possible incapacity-for-work clause (AU clause). This may already provide benefits after six months’ sick leave.
Optimising tax aspects: deducting contributions to basic ability insurance
Contributions to basic ability insurance can, under certain conditions, be claimed as provision expenses in the tax return.
Under § 10 EStG, they count as special expenses.
The maximum amount for other precautionary expenses is €1,900 for employees. For self-employed people, it is €2,800 per year.
This maximum amount is often already used up by contributions to health and long-term care insurance.
Pensions paid out from basic ability insurance are generally exempt from income tax.
A careful review of your basic ability insurance in the tax return is recommended. For details, it is best to consult a tax adviser.
Before taking out basic ability insurance, you should check carefully. Which abilities are essential for your profession and everyday life?
Define a sufficiently high benefit amount. Ideally, this should be eighty per cent of your net income.
Look for customer-friendly definitions of the abilities. A short prognosis period (e.g. six months) is advantageous.
A guaranteed future insurability option allows later adjustments without another health check.
Always answer health questions truthfully. This is crucial to avoid jeopardising your cover.
Compare the terms and conditions of different providers carefully. There are no uniform standards.
Consider whether additional modules make sense. Examples include mental illness cover or a benefit in the event of incapacity for work.
Also clarify what options for cancelling basic ability insurance are available.
Checklist before signing the contract:
Which specific abilities are essential for me?
How high does my monthly benefit need to be (at least eighty per cent of net income)?
Is cover guaranteed until the standard retirement age (e.g. 67 years old)?
Are the definitions of the benefit triggers clear and understandable?
Is there a guaranteed future insurability option for later adjustments?
What exclusions apply (e.g. for certain pre-existing conditions or the practice of certain extreme sports)?
Is an indexation feature included to adjust for inflation?
Is there an option to switch later to occupational disability insurance, if relevant (e.g. for young people or children)?
Comprehensive advice can help clarify these points and find the most suitable cover.
Target groups in focus: Who is basic disability insurance particularly suitable for?
Basic disability insurance is a particularly good option for people in physically demanding occupations. These include tradespeople or care workers.
It can also be important for self-employed people and freelancers. They often do not have statutory accident cover.
People with pre-existing conditions often find an alternative here. They may not be able to get occupational disability insurance (BU). Or only at very high premiums.
The health check is often less strict for GFV than for BU.
For young people and children, basic disability insurance can be worthwhile. It serves as introductory cover with an option to switch to BU.
Tariffs for children are sometimes available from as early as six months old or from the age of five.
The decision for basic disability insurance is always individual. It should be tailored to the personal life and occupational circumstances.
Request a risk analysis: your path to tailored insurance cover
Choosing the right cover requires a careful analysis of your individual situation.
The aim is to find the balance between comprehensive cover and affordable premiums.
Professional advice will help you do this. Identify the right components and avoid pitfalls.
Take the opportunity to have your personal risk situation checked free of charge.
This will give you concrete suggestions for optimising your insurance cover. You can look to the future with confidence.
Request your individual risk analysis now and have your insurance situation checked free of charge.
You will receive concrete suggestions for optimising your tailored cover.
More useful links
Wikipedia offers a comprehensive overview of basic ability insurance.
Statistisches Bundesamt (Destatis) provides comprehensive content on the topic of people with disabilities.
Statistisches Bundesamt (Destatis) contains a press release on statistics about people with disabilities (July 2024).
Rehadat-Statistik provides statistics on people with severe disabilities.
Bundesministerium für Arbeit und Soziales (BMAS) provides a research report on a representative survey on participation.
Statistisches Bundesamt (Destatis) contains tables on age, gender and the rate of people with severe disabilities.
Rehadat-Statistik provides an overview of types of disability from the severe disability statistics.
Deutsche Rentenversicherung provides information on rehabilitation measures.
FAQ
What exactly is meant by basic ability insurance?
A basic ability insurance policy is a type of risk insurance that pays a monthly income if you lose one or more fundamental physical or mental abilities defined in the contract (e.g. sight, walking, speaking) due to illness, accident or declining strength for a specified period (usually at least six months).
How high should the benefit be in a basic ability insurance policy?
Experts recommend a pension amount of around seventy-five to eighty per cent of your current net income in order to cover ongoing expenses and, ideally, contributions to retirement provision as well.
Are mental illnesses covered by basic ability insurance?
Mental illnesses such as depression or burnout are usually not covered in basic plans, or only to a very limited extent (e.g. in severe forms such as schizophrenia). However, some providers offer optional add-ons for mental health conditions.
What happens if I lose an insured basic ability, but can still work?
The basic skills insurance also pays the agreed benefit even if, despite the loss of an insured ability, you can continue working in your occupation. The benefit is not linked to occupational disability.
Is a medical examination required when taking out basic disability insurance?
Yes, before taking out a basic ability insurance policy, health questions must be answered. These are often less strict than for occupational disability insurance, but truthful information is crucial for any later entitlement to benefits.
Can I also take out basic disability insurance for my child?
Yes, many insurers also offer basic ability insurance for children, sometimes from as early as the sixth month of life or from the age of five. These can often later be converted into occupational disability insurance without a renewed medical assessment.
