Incapacity protection - the most important, but how do you do it right?

Our own work capacity is the greatest asset we possess. It enables us to generate income, secure our quality of life, and achieve long-term goals. But what happens if we are suddenly unable to work due to illness or accident? This is where incapacity protection comes into play. But why is it so important, and how do you ensure you get it right?

Our work capacity secures our income – and thus everything we can afford with it. A sudden loss of ability to work, whether due to an accident or serious illness, can therefore have significant financial consequences. Especially at a time when social security systems often only offer basic coverage, it is all the more important to have private insurance. Without appropriate planning, the loss of ability to work can quickly pose existential threats.

Statistics show that one in four people will experience at least one episode of disability during their working life . In many cases, statutory disability pensions are insufficient to maintain their previous standard of living. Therefore, private incapacity insurance is essential to close this gap.

The various options for insurance

There are different ways to protect your work capacity. The most appropriate one depends on your individual life situation, profession, and personal risk. The most common forms of coverage include:

• Professional incapacity insurance (PII): The PII pays a monthly pension if you can no longer perform your previous occupation due to illness or accident. It is considered the most comprehensive form of insurance because it covers the last occupation you held, independent of whether it is the one that you had once the contract began.

• Disability insurance: This insurance provides cover if you are no longer able to work in any profession. It is often cheaper than occupational disability insurance, but offers less coverage.

• Accident insurance: This protects against the financial consequences of accidents, but does not cover illnesses that much more frequently lead to incapacity to work.

• Basic Skills Insurance: This insurance provides a pension if you lose basic skills such as sight, hearing, walking, or speaking. It is particularly useful for people who cannot obtain professional incapacity insurance due to health reasons, or for professions where physical skills are paramount, such as craftsmen or artists.

• Dread Disease Insurance: This provides a lump sum payment for serious illnesses such as cancer or a heart attack. This insurance is designed to cover high treatment costs or bridge financial gaps.

How do I find the right insurance?

Choosing the right insurance is a personal decision and should be carefully considered. There are a few important points to consider:

• Occupation and risk class: Occupation plays a major role in choosing insurance. Skilled trades or physically demanding jobs are considered higher risk and are therefore more expensive to insure. Nevertheless, it's still important to have coverage in these professions, as the likelihood of being absent is higher.

• Honest health information: When purchasing incapacity insurance or similar products, honest information about previous medical conditions is crucial. False information may result in the insurance company not paying out in an emergency.

• Amount of coverage: The amount of the monthly pension should be chosen in a way that maintains your standard of living. It's advisable not to budget too tightly, but also not to pay unnecessarily high premiums.

• Flexibility: Good insurance policies offer a guaranteed additional coverage. This means you can adjust your coverage if your life situation changes, for example, due to a salary increase or an addition to your family.

• Review old contracts: The maximum actuarial interest rate increased on January 1, 2025 , allowing many insurers to offer significantly lower rates. This means: Even if you already have protection, it's worth comparing existing contracts. Better terms are often available for the same level of coverage, which can lead to a noticeable reduction in premiums in the long term.

When should you take out workforce insurance?

The earlier, the better. Young people without pre-existing health conditions benefit from lower rates. With increasing age or with pre-existing conditions, not only do the costs increase, but so does the risk that health restrictions make it more difficult or even impossible to obtain insurance.

Conclusion: Incapacity insurance is essential – and should be well thought out

Work capacity protection is not a luxury, but a necessity to ensure financial security should the worst happen. There are many different ways to protect yourself – the right one depends on your individual situation.

Finding the optimal solution from the many options available can be complex. It's helpful to seek detailed advice to find the best coverage for your needs. We support our clients in making the right decision and place particular emphasis on ensuring that all costs and benefits remain transparent. This way, you can be confident that your workforce is reliably protected – long-term.