Planning the monthly occupational disability benefit (BU-Rente): need, term and existing entitlements

Working out your need

The starting point is your net income. The Verbraucherzentrale cites 80 percent of current net income as an often good guideline. Calculate which fixed expenses continue in an emergency: housing, insurance, mobility, maintenance payments, loans and reserves. Some of these may fall away, and some may be added, such as costs for care or therapy.

Which entitlements already exist?

Statutory pension insurance does not pay an occupational disability pension but a pension for reduced earning capacity (Erwerbsminderungsrente). According to the Deutsche Rentenversicherung, it requires that, because of illness or disability, you can work less than six hours a day, and in any activity, not only in your previous profession. If you can work less than three hours a day, there is full reduction in earning capacity; at three to under six hours, partial reduction. In addition, you must have been insured in pension insurance for at least five years and have paid compulsory contributions for at least three years in the last five years before the reduction in earning capacity began.

The Verbraucherzentrale points out that the pension for reduced earning capacity is on average below the basic income support level (Grundsicherung). A private occupational disability insurance, by contrast, protects your previous profession. How high your statutory entitlement is, is shown by the pension information (Renteninformation) from the Deutsche Rentenversicherung.

Setting the term

The Verbraucherzentrale recommends taking out the contract ideally until you reach retirement age, that is, until age 67. A shorter term lowers the contribution but leaves a gap between the end of the contract and the start of the pension.

Looking at the benefit and the terms together

• Dynamic increase (Dynamik): it helps to offset income increases and inflation so that the purchasing power of the benefit is maintained.
• Option to increase coverage without a new health assessment (Nachversicherungsgarantie): provided the contract conditions are met, it allows a higher benefit on certain events such as marriage, the birth of a child or career advancement, without a new health assessment.
• Waiver of abstract referral to other occupations (abstrakte Verweisung): the insurer then does not refer you to other activities. More on this in the article on contract terms.

The right scope depends on your income, your family and your running obligations. These notes do not replace a personal needs calculation.