Berufsunfähigkeitversicherung

While the topic of "Health Insurance" is raging, I thought new might be a good time to slip in a question regarding the other type of insurance widely used in Germany - Berufsunfähigkeitversicherung (BU).

I have conducted a little straw poll around my office and it seems that 90% of them have a BU to cover them if they ever have to give up their profession through an accident.

The prices/coverage etc vary massively I know, but is this something that is worth thinking about or is it just another clever money spinner by the insurance companies who love to cash in on the German's huge aversion to any sort of risk (and seem to pay any amount of money for "piece of mind")???

If I was a fire eating, lion wrestling, high wire walking, stanley knife juggling circus performer with 5 children and a crack habit, then I would say that BU is probably quite a good idea to maintain some level of financial income if I couldn't work.

As it is, I work all day at a computer and for me to become BU I would have to loose 2 arms and/or 2 eyes. This is possible, but unlikely. Although I have heard claims that vast percentages of people become BU before retirement age.

Anyone out there think BU is a JA JA JA, or is it more of a BOO HISS?

What actually is termed as berufsunfähig does not have to be as drastic as loosing arms and legs, you hear cases of office workers who have back problems etc. who say they can no longer work in an office environment and therefore are berufsunfähig.

As to wether to get it, not sure, still contemplating it myself. Like you say office workers may not be the area it is aimed at, but not sure of the statistics.

I always thought this was the thing to take out if you build a house or take out a loan etc.

Thats why I was toying with the idea. You have your own house as well don't you?

not yet ... looking at one on friday.

Ah, ok, so who's house were you renovating?

when? on my page? that is where we live now, a house converted into two flats

I think it serves a purpose if you need it one day. Just look out for the difference between Berufsunfähigkeit which you can get for 15 euros a month and the combination between that and life insurance, which is about 50 pm and if you don't claim you get your payments plus a little interest back. I have the latter, but think you should rather go for the former-no mess, no fuss and it is cheap.

I think this is the insurance which covers you after the company stops paying you when you're on the sick. The company pays your salary for 6 weeks, after that you go on the social (which is a percentage of your salary up to a certain amount).

I guess if you earn more than the salary cap & have wife & kids it makes sense. But I think it only lasts for 18 months or so. You just have to check the different offers & see if it makes sense for you.

My father in law took out this insurance many years ago. He got a heart problem and had to give up work and the insurance company paid him monthly right up to his retirement age. Nowadays they might not be so generous so I would read the small print carefully.

There have been one or two problems with the definition of Berufsunfähig. You might not be able to work in your previous "Beruf", but might be able to work elsewhere, this might not make you Berufsunfähig.

In Germany they have a problem with the definition of everything

Personally I think it's unnecessary. But I tend to disregard these types of risks. Germans are so over-insured - why else are the German insurers so massive? And then they make up some kind of crap like a bad back to try to get paid out.

My advice: stop filling the insurance companies coffers (they'll dispute your claim anyway), take your foot off the accelerator, look both ways when crossing the road etc. You're better off with all your limbs than you'd be claiming on Berufsunfähigkeitversicherung.

I apologise for the spelling mistake above. I'd say it was a typo but to be honest I just wasn't thinking straight. I promise it won't ever happen again. I may have been influenced by the thread's title but in no way am I attempting to shift the blame.

Of course, you all know that it should be spelt like this: Berufsunfähigkeitsversicherung

Damn right they are. I remember a dad of one of the kids at our kindergarten who was an Allianz guy (smart talking bugger he was too) who tried to flog some kind of crappy insurance product (it was called something naff like Private Kinder-Unfall-Versicherung) to the other parents at the kindergarten by playing on their bad conscience and also SHOCK HORROR the fact that kids are NOT INSURED ON THE WAY TO AND FROM THE KINDERGARTEN.

Like - oh my god - the risks I expose my son to! Were any of us ever insured during our time off school? What would have happened back then if we had broken a leg or whatever? Sounds more like a ruse to flog more insurance that no one needs!

Right, I think I have learnt two things:
1. There is one more s in BU than I thought.
2. I shouldn't lie in bed worrying that I haven't got it.

Lie in bed too long thinking about it and you'll either get chronic bed sores or go mad, in which case you won't be able to work. Hope you have insurance ...

I think the Berufsunfähigkeitsversicherung is worth thinking about. Don't want to make things complicated,
but there are 2 cases that need covering: Berufsunfähigkeit (BU) and Erwerbsunfähigkeit (EU).

BU is when you are unable for at least 3 years to work in your (current) job. Beware: some policies give the
insurance company the right to "force" you into another job. So in your contract, make sure to have a passage regarding "Verweisverzicht", then the insurance company won't do that (hopefully).
Depending on your job and your "life as such" (smoker!), premiums can be quite steep, and some
companies refuse to insure all together.

EU is when for at least 3 years, you can't do any job (work, that is) longer than 3 hrs per day.

The reason why your German colleagues have the BU is that people born before 2.1.61 do not have
an automatic cover any more.

More and more companies offer BUs without a life-insurance attached, it's worth checking.

Depending on your German, have a look at Stiftung Warentest (German "Which"-Magazine), their monthly
magazines "Test" and "Finanztest", they regularly test those products. Hope this helps.

I remember every year bring home forms from school for optional accident insurance and every year my Dad throwing them away.

Personnally I'd go for the BU, I took out a BU policy years ago and its a good job I did. For someone like me who is employed as a heavy goods driver; we (drivers) are prone to losing our livelyhoods if:

We become injecting diabetics.
Our sight fall below a set standard.
Should we suffer a heart attack.
Should we suffer a stroke.
Should we become disabled.


All (or any, in my case) of the above wouldn't normally disqualify members of another trade from working, but drivers become legally disqualified and a BU coughs up to someone in my trade far more than an office worker!

We are still looking at it as well, my wife is a secretary so you tend to think it is not so necessary, until she had to have her hand operated on and put her out of actions for a few weeks. It would only take some minor form of artheritis, rsi, or similar recurring problem to the one she had before to become BU as she would not be able to type.

i have a personal disability insurance, but stupid me, because i once went to a doctor for a ringing with my ear, i wrote this on the initial formula and voila, anything tinnitus related that could make me Berufsunfähig is not covered (so depression resulting from tinnitus, etc. -- because of the paranoia, I go to the ENT doc once a year and my ears are fine). i was told there was no use to fight it. i regret not listening to my own instincts then.

anyhow, with my new job, one of the perks is a BU - no medical checks, nada. And I was thinking of canceling my old contract and saving myself the 47 Euro a month. but i'm wondering if I should? If i get BU during my time with my current job, could I theoretically use both insurances? I think that is overkill, but who knows? and 47 Euro - i could put that somewhere else.

Also, anyone know what happens if after I leave my current job (where BU has no background or med checks), that if my next BU looks at what policies I used to have? I mean, do they check, "oh Ms. So-And-So had a policy for 4 years, with ears excluded, but this last one had no exclusions..."

I had BU for about a year and then binned it. It was just one insurance too much. It cost 80€ a month for an in-the-event payout of 1500€ a month and get this - they ruled out anything spinal as I'd had a stiff neck about four years ago that I went to the doc with and that he prescribed massages for. So even if I had had an accident that resulted in a back injury, it wouldn't have been covered due to a bit of Spannung in my neck I picked up because I sat at a PC all day. Basically, if you want total coverage, you should have not visited a doctor in the last 5 - 10 years, depending on the policy.

It´s definitely worth considering, in my opinion. It might be worth thinking about the alternative kind of product:"critical illness cover"(Schwere Krankheit Vorsorge). Leading companies (Skandia and Canada Life) offer cover for up to 35 different dreaded illnesses, eg cancer, stroke etc), which pay out a lump sum if such an illness is diagnosed.The advantage is you don´t have to become "berufsunfähig", but maybe need treatment for a while. My dentist had a tumor two years ago but owing to excellent treatment was able to return to work three weeks later. A critical illness would have paid out but not a Berufsunfähigkeitsversicherung" as you normally have to be diagnosed as unfit to work for at least the following six months.This kind of cover is specially advantageous for non-smokers as there can be a premium reduction of up to 40%.Modern critical illness cover also includes severe back problems and psychological disorder.Just my tuppence worth!

a BU or Berufsunfähigkeitsversicherung is actually one of the most important insurances at all. Even though most people don't use and see it as a loss of money. In Germany only around 25% of people have a decent BU.

Why should you have a BU? Simply ask yourself: starting from today, how much money can/will I earn with my present job until pension time? This is the value or fortune you would insure with a good BU. If you are in the mid thirties and earning net 2.500.- EUR per month, for example, we are talking about future profits from your ability to work in excess of 900.000.- (ninehundredthousand!) Euros.

Most people would insure a house with this value against all kinds of loss and destruction and not think a minute about it. Hell, most people with new cars costing maybe 40.000.- EUR will rather pay some 30-40.- plus each month on their car insurance in order to get the money for the car back if it is destroyed in accident. But they see the insuring of their ability to work and earn money as a loss --- which is why some BU insurance offer combination of insurance and investing in funds, but this is just another of those combination products like investment life insurance which don't make much sense.

Elfenstar: you did absolutely right to mention the tinitus thing in your application form because failing to do so could void the coverage of the insurance in all cases, even if you would suffer from a major accident or a heart attack if the insurance finds out. This is why people should apply for BU when they are young and health in order to avoid loosing some coverage later in life.

And here we come to your current problem: if you cancel your current BU now and reapply in a couple of years and your health has deteriorated in any other way, you will also loose this new health problem in your coverage or pay a lot of risk premium on top. My advise would be a) to check how much the new job-related BU is actually covering of your current salary. Should be 70-80% if you want to be covered well. If it is below, use the other old insurance to fill the gap. You can always adress your old insurance a re-negotiate a lower coverage and thus reduce the premium to a more bearable level.

Depending on your kind of job and your kind of insurance it might be a good point to check if the coverage is really what you want. There are some hidden traps in some older small-prints of insurances that need checking. Get an independent broker somewhere close to you to have it checked. In some cases a dread disease insurance might be a better solution than a typical BU but I do not know enough about your job descritpion and your insurance in order to give you solid and reliable advice here.

righter: it might be that your application was not handled well or that the doctor gave some harmful information to the insurance because he was not properly briefed before. Or it might be that your back problems are already really so severe that no insurance can cover it without immens risk and costs. But that does not mean that by not having such an insurance you are doing the smart thing. You do the math as I suggested above and then check what are the major reasons to become BU in general and in your profession in particular. Maybe you would be better with a dread disease insurance instead or maybe not. Anyway, don't discard this coverage to lightly, your future income from work is just to valuable not to be covered somehow.

Cheerio

I accidently cancelled my BU, don't ask, and when I realised what I'd done I uncancelled it, but because I'd had a shoulder injury 3 years before they tried to exclude all back related problems, but my doctor wrote a letter saying the treatment had been successful and I have had no further problems and the insurance company dropped the exclusion clause.

I thought this is a standard cover anyways. What, you have to pay extra for?! I'll call my insurance agent now.

thanks Starshollow for your advice. i had a closer look, and it seems with the occupational disability pension I selected to contribute 30% of my annual pensionable income to this plan. max was 40%. min was 15%. admittedly, even in english, i was overwhelmed. still confused.

I'll have to look at my private BU and see if i cover the gaps.

do you know if it is possible to renegotiate my BU to get ears ruled out. i have lots of proof from my ENT that there have been no issues.

I am being pushed by my husband and the insurance salesman to get a BU. And I'm still sceptical of it. The one I was looking at was 50 a month. I could, however, combine that with a retirement fund, bringing total monthly payments up to just over 100 Euros- but apparently if I did the combo one I could deduct it from my taxes.

My question is, because I'm on a tight budget at the moment, does it make more sense to start something like this or just go for a savings account or invest some money that way instead? I plan to stay in Germany for the long haul, but what if I end up not? Then the BU doesn't do me much good and the money's gone. Where as with savings or similar, I could at least get the money back.

These type of things confuse my anyway, but does anyone know why a BU would be more beneficial to me than just investing money somewhere where I can get it back if I need to?

the thing with BU is, you're insuring yourself against what happens if you become disabled and can no longer work. it's not a savings plan. if you get disabled tomorrow and cannot do the job you were trained to do, then what? how will you pay your bills? what if you have a family and you're the sole wag earner? the things is, if you become disabled, this insurance will pay you a monthly sum until you hit retirement. if you've only paid in for a year and you're 30, then that is 30 years they have to pay for you. sucks for them, good for you.

i sit at a desk all day. i go to the gym,t ake care of myself, still so many of my colleagues have back problems. some even stand all day so tehy can work. i feel better knowing i have it.

Looks like I should write another WIKI soon about BU in general, why it is important, what it covers and what you have to be careful for or ? If people think that an unbiased WIKI would be helpful for them, let me know and I'll take the time to work something out.

Fallen Angel: while it is good that you are being pushed to get yourself a BU, the proposal to do a combination of insurance and investment is bulls, if you excuse my French. All the major consumer protection agencies are strongly against it. There are two major reasons:
a) comparison of individual performance/costs of each part of the combo becomes very hard because there could be some case of cross-financing among the combo-parts. If you want to invest money for pension, look for the best product in this area and you can easily compare monthly costs, performance and so on. The same is true for the insurance: look at the monthly premium and the guaranteed pension payment and then compare it with other likewise insurances in order to find the best insurance. This combo-product is just a sales-trick to make you forget that you pay money for an insurance coverage an like with any other insurance, whether it is car insurance or house insurance or health insurance, if you don't need the insurance the money is gone for good. Just re-read my comments above to determine how much money you will be able to earn until pension time and you know what kind of value you are covering with an insurance.
loss of control in times of income problems: imagine that you have two separate contracts, one for BU and one for investment/pension plan, lets say for sake of the argument each 50.- EUR per month. Now you loose your job or for any other reason money is a bit tight for a while. You can now decide to inform the carrier of your pension plan that you'll need a brake of your investment for a couple of month but you can still afford the other 50.- EUR for your protection. Now if you do have a combo product, you can usually only inform them that you are not able to pay the 100.- EUR total per month and you need to interrupt the contract for a while - which also means that you'll have no protection for a case of BU during that period. That is the other reason why consumer protection organisations are against combo-products and I do fully agree. Those combo-products are just designed to give the salesman/insurance agent more commission with one single contract.

ALWAYS separate INSURANCE FROM INVESTMENT!

One other thing is that in order to check the value of a BU, a couple of small print areas are very important. There is for instance in some very inexpensive insurances the so called "Abstrakte Verweisung" which means that even if you can not perform your current job anymore, the insurance can refrain from paying the pension if they find any other kind of job you could do with your qualifications. That does not imply that you would stand a chance to get such a different job, that would be your own risk. For instance a carpenter who can not continue to work for loss of limb can be referred to work as a furniture salesman - even though he has not talent for selling and no furniture house would take him. Good contracts should only have the so called "konkrete VErweisung" which means that you actually take up another job later on and the job brings at least 80% of your former income than the insurance can cancel the monthly payment. Some really good insurances, however, totally void the "VErweisung" in their small prints. these should be prime choice. Some insurances have changed the first check of your situation towards "Konkrete Verweisung" but are using the "abstrakte Verweisung" within the small prints of "Nachprüfung" which means the yearly check-up by the insurance if your condition has improved. So you might get pension for one year and then they will inform you that you could still work as short-order cook instead of your prior job as manager of a restaurant and stop the pension payment. If you can not read and understand the small print for lack of language skills or for lack of understanding the insurance lingo. get yourself professional help.
Another thing is the timeframe the doctor(s) have to predict you to be unable to perform. Normally the small print should point out that the doctor needs only to predict that you will not be able to do your job within the next 6 month in order to get the coverage kick in. But some insurances have a time horizon of 3 (THREE!!!) years and what doctor can and will predict your health condition for the next three years? If he can savely predict that you will not be able for the next three years or longer, that means that you are probably declared to by dead already...

These are just a couple of areas that need to be checked. You can get help either from an independent broker who is not bound to any particular insurance or by a consumer protection agency.

Freelancer and self-employed should often look for a totally different kind of insurance because they will get back to their own work even with the proverbial head under their arm. If they can not perform their job due to a major accident or illness, they usually need someone to hire urgently to step in and fill the gap for the protection of current business and contract fulfilment. Here a so called dread desease insurance which covers up to 36 different and clearly defined cases of illness (among them cancer, coronary/heart attack or stroke/apoplexia) and which will pay out, like a life insurance, an insured lump sum at the moment that a doctor signs that you have any of these 36 illnesses. This is in my opinion the better solution for freelancers and self-employed as well as for managment in employment.

Should you require more information, PM or click the link down at the disclaimer...

Cheerio

Starshollow, I think your "disclaimer" is actually a disclosure and not a disclaimer.

I think that the disclaimer refers to Toytown and not Starshollow. I have to say that despite some earlier cyncism on my part that Starshollow provides level headed, impartial, individual advice and a wide range of alternatives. I have read what he has written and it sits very firmly with my own interpretations.

My knowledge of BU products in the German market is somewhat limited but what I do know is that there is a one in four chance of being disabled for a one year period at some point in your life. If you had a machine churning out x amount of euros per year in your cellar would you insure against it breaking down ? Off course you would, especially if there was a twenty five per cent chance that it would give up the ghost.

You also need to have the correct amount of coverage to take into account things like inflation. I will add a caveat though, only buy the insurance you need, it is an expense. As an example car insurance is a wonderful product but no one in his right mind would buy it if he did not own a car. Analyse your needs properly and if you cannot do it yourself go to Starshollow for advice.

Topcat: thanks for the nice comment. Will try to continue the good work for our community here...

With regards to BU: totally agree with your line of reasoning. I already pointed out someplace above that the value people insure when getting a BU is easily in excess of 1 Million EUR and everyone one would ask would insure a house or other tangible valuable against theft and destruction for sure.

However and just to confuse you guys even more: there is a legal difference between Berufsunfähigkeitsversicherung and Erwerbsunfähigkeitsversicherung. The BU covers you for not being able to perform your specific job anymore, the EU covers you against loosing the ability to do any work at all. In 2000 (sorry for the old stats, have to get some new ones) there were in Germany a total of 1.894.033 cases where people received pensions for not being able to work anymore. Out of this, only 120.902 cases were BU, the rest, 92,81% were EU-cases. Therefore especially for employees the choice might be better to take the less expensive EU-insurance...

For most freelancers and selfemployed, the main question is a bit different: among employees, nearly one third of the BU-cases come from psychological problems, mainly burn-out syndrom etc. (very, very often teachers, for instance). This is something rarely found amoung freelancers, selfemployed and typically a selfemployed will continue to work even with his head stuck under his arm (very German saying, I guess now that I think of it). In addition selfemployed to have often higher fixed monthly costs and if the can not continue to work they might loose their whole livelihood if they do not find someone who can replace them for the time being and finish the pending contracts and so on. Therefore the immideate need for cash is much higher for freelancers and self-employed than for most employees. This is why I recommend a so-called "dread disease" insurance as a better option for freelancers/self-employed. With this form of insurance, know in Germany only for a couple of years and introduced by Canadian and English insurance companies, you insure yourself against a given set of major illnesses that might impede you to work such as heart attack, stroke, cancer and many more (list is around 36 illnesses tops). While with the BU you always need to find a doctor who will certify that you will not be able to work for a period of at least 6 month (beware: some insurances expect the doctor to certify for 3years which makes it highly unlikely to get the BU pension payments ever!) in case of the dread disease insurance as soon as a doctor diagnoses you with say cancer, the insurance will be oblidged to pay the insured amount. This amount should be at least 1y worth of your income, usually better 2years. There are pros and cons to be valued against each other here:
- if you suffer from an illness that will never allow you to get back to your job or any job at all, of course the lump sum payment will be gone sooner rather than later, in such a case you would be better of with monthly pension payments from a BU
+ looking at the stats again, you are more likely to suffer from cases of cancer, heart attack and the likes than from other cases which are typically the reason to get BU-pension payments. In 2000 there were 120.000+ cases of new BU-claims in Germany, among which the major illnesses recognized were 1. damages to spine and joints: 38.689 cases; 2. Heart and coronary system: 21.763; 3. accidents: 14.508; 4. psychological: 13.229; 5. cancer: 12.090; 6. stroke: 4.836. In the same year the number of cases of illness reported for cancer, heart attack and stroke in Germany are as follows:
cancer: 330.000 cases; heart attack 300.000 and stroke around 200.000. This means that while your riks to suffer from these illnesses is much higher than for instance loosing some limbs in an accident or being paralyzed, as you can see above this does not often lead to being BU, thanks to the far better chances of recovery by early and good treatment with modern medicin. For employees this means they can go back to their former job after hospital and rehabilitation treatment afterwards. But for selfemployed there is the risk that during the time or treatment and recovery their fixed costs can eat up their savings and whats more: the need to hire someone to step in and continue the work flow for their clients. Therefore a lump sum payment of for instance 50.000.- EUR in case of cancer can help them to get through some anxious and hard couple of month to fight the cancer without fearing to need to apply for Hartz IV afterwards.
+ another neat thing is that freelancers/selfemployed can insure the spouse in the same contract. If your spouse is not the main earner of bread in the family, in case of illness of the spouse you do experience next to the sorrow for the health of a loved one the problems for instance to hire a full-time nanny and personal to clean the house and so on if you do not want to reduce the hours working for your own job/company. In cases like this a coverage of 15.000 - 20.000 EUR can help the family to go through a hard time much easier.

If you decide to have a BU or a DD (dread disease) insurance requires carefull weighing of risks for you and your family. Both can be rounded of with an accident insurance which can either provide lump sum payments or pension payments in case of severe illnesses from suffering an accident. However: once you have people depending on your ability to earn the money for living such as non-working spouse and children, you need to take this kind of insurance extremely serious.

So much food for thought from a professional point of view.

Cheerio