BU contract terms: important concepts clearly explained

Occupational disability

The law defines occupational disability (Berufsunfähigkeit) in § 172 para. 2 VVG: a person is occupationally disabled if, as a result of illness, bodily injury or a loss of strength beyond what is normal for their age, they are likely to be permanently unable, wholly or partly, to practise their profession. What counts is the most recently practised profession, as it was shaped without health impairment. What your contract provides in detail is set out in the terms.

Abstract referral

Under § 172 para. 3 VVG, insurer and policyholder can agree that benefits are only paid if the insured person also cannot pursue any other reasonable activity that corresponds to their education, experience and position in life. This is called abstract referral (abstrakte Verweisung). The Verbraucherzentrale describes waiving it as an essential condition: the insurer then does not check whether, with your knowledge, you could still pursue another activity.

Benefit amount and term

The insured monthly benefit and the contract duration determine how far you are protected in an emergency. As a guideline, around 80 percent of net income applies, and the term should ideally extend until you reach retirement age. More on this in the article on planning the monthly occupational disability benefit.

Option to increase coverage without a new health assessment (Nachversicherungsgarantie)

It makes it possible, provided the contract conditions are met, to increase the benefit on certain events such as marriage, the birth of a child or career advancement without a new health assessment. Pay attention to which events count, up to what age and to what extent the increase is possible.

Dynamic increase (Dynamik)

A dynamic increase raises contribution and benefit regularly. It is meant to absorb income increases and inflation so that the purchasing power of the benefit is maintained. Check whether the increase also continues in the event of a claim.

Health questions and duty of disclosure

Wrong or incomplete information in the health questions can allow withdrawal, termination or adjustment of the contract (§ 19 VVG). More on this in the article on health questions.

What to look out for when comparing

• Does abstract referral apply, or has it been waived?
• Does the term extend until retirement?
• Is there a dynamic increase and an option to increase coverage without a new health assessment, and on what conditions?
• Are the conditions for a claim described in an understandable way?

The terms of individual insurers cannot be transferred to the whole market. Have the specific terms checked before you take out a policy.