Income Protection

Income
Protection

The most important things about occupational disability in brief:

Occupational disability insurance (BU) is recommended for anyone who relies on their income from work.
In most cases, the statutory disability pension is not sufficient if you can no longer work due to occupational disability.
Your state of health and your age determine whether and under what conditions you can conclude a contract.

Your benefits when being insured in the event of occupational disability

Securing living standards and pensions in the event of occupational disability
Entitlement to benefits from a 50% reduction in your ability to work
The earlier you start, the lower the contributions

Why is protection through occupational disability insurance important?

BU insurance kicks in if you can no longer do your job in whole or in part. This is what makes it different from the statutory disability pension. This only pays out in full if employees can do any work for less than three hours a day. If employment is possible for three to six hours, only a reduced pension is paid out. On the other hand, you will receive an occupational disability pension if you can do less than 50% of your previous work in your job.

When should you take out occupational disability insurance?

Experts unanimously recommend taking out insurance as early as possible to cover yourself in the event of occupational disability. This is because the premium for occupational disability insurance depends largely on the following factors:

Age at conclusion of contract
Agreed amount of pension
Contract term
Practiced profession
Pre-existing conditions
Hobbies (only dangerous leisure activities with a high risk of injury)

The earlier you decide on occupational disability insurance (BU), the lower the premium will be. In addition, as you get older, you are more likely to develop pre-existing conditions. These can lead to providers excluding benefits, demanding risk surcharges or refusing to provide insurance altogether. But even in this case, there are alternatives, such as insurance against serious illnesses. We are happy to provide you with comprehensive advice and submit preliminary insurance inquiries to various providers for you.

Occupational disability has many causes

The level of cover should be sufficiently high from the start. MLP recommends cover of 80 percent of your net salary. Start early: the younger and healthier you are, the lower your contributions will be.

How does occupational disability insurance protect your standard of living?

A BU always insures you individually. In addition to age and health, your profession is a key factor in the coverage. The physical and psychological stresses of the job are taken into account, as is the associated standard of living. This affects the premium, but also the amount of possible pension benefits. In addition, profession-specific agreements can also be made, e.g. by including an infection clause that protects doctors in the event of a professional ban.

Occupational disability: The benefits of occupational disability insurance

The benefits of occupational disability insurance are clearly agreed upon when the contract is concluded. If you can no longer perform your job in whole or in part for health reasons, you will receive an occupational disability pension in the agreed amount. In combination with a savings contract, the insurer can also agree to continue paying the savings installments in addition to the pension. The differences are in the details, so it is highly recommended that you seek comprehensive advice.

Conditions of occupational disability insurance

Long forecast periods and abstract reference

In the past, the so-called abstract reference was part of most contracts. Today, the clause is usually offered to reduce premiums. Avoid it if possible. Because the abstract reference allows the insurer to refuse to pay the disability pension if you could work in a comparable job. Whether you actually find a job is irrelevant. Long forecast periods of more than six months also make little sense because doctors often cannot reliably assess your occupational disability over months.

Agree on a lump sum pension payment

Occupational disability insurance (BU) has a flat-rate and a graduated pension payment arrangement. With the flat-rate arrangement, the agreed BU pension is paid out when 50 percent of the ability to work is lost. With the graduated arrangement, you receive a quarter of the agreed pension from 25 percent and half from 50 percent. However, the full payment is only provided from 75 percent. Disputes over individual percentage points are almost inevitable.

What happens when you change careers?

Whether you have to report a change in occupation to the BU insurance company depends on the insurance company. Many providers classify the risk class based on the activity when the contract is concluded and do not change anything. Only a few companies adjust the premiums when a change occurs.

Think about adjusting the benefits

Life is getting more expensive every year and a disability pension that is sufficient today may not be enough in ten or 20 years. With a dynamic plan, contributions and benefits increase by an agreed percentage each year. This automatically compensates for the rate of inflation. With a supplementary insurance guarantee, benefits can be increased without new health questions on certain occasions such as a wedding or the birth of a child. Naturally, financial needs increase as your family grows and you take on more responsibilities.

What forms of occupational disability insurance are there?

With this insurance you can choose from three different types.

Self-employed occupational disability insurance (SBU)
Occupational disability insurance in combination with a private pension insurance (e.g. basic pension)
Occupational disability insurance in combination with term life insurance

With combination products, you not only receive the pension, but your contributions to the savings plan are also paid by the insurer. This also secures your retirement provision.

Advantages of occupational disability insurance

This insurance covers illnesses and accidents and also covers mental illnesses. It protects your income from work and maintains your standard of living, even if you are still able to work for a few hours.

Does it make sense to change provider?

Whether it is worth changing provider depends largely on the individual case.

We are always available to provide you with advice and support and help you find a suitable provider or change your occupational disability insurance.

Optimize your protection

If you would like to make additional provisions for your old age, you can combine your occupational disability insurance with a basic pension. The tax advantages of this type of pension provision then also apply to your occupational disability insurance and you can claim its contributions as special expenses in your tax return.

Would you like to know more about occupational disability insurance?

The best way to find out which occupational disability protection options are available to you is to have a personal discussion with your MLP advisor. Simply arrange an appointment and we will work with you to determine the best strategy for protecting yourself with an occupational disability pension.