What are the benefits of a disability pension?
The benefits of a disability pension are numerous, offering individual solutions for different life situations, ensuring that each insured person gets the exact protection they need. It's also worth noting that most insurers already pay out a portion of the benefits with a disability of just 25%. Taxes can also be saved, as part of the annual premiums paid can be deducted from taxable income.
Furthermore, the disability pension can be perfectly combined with retirement provision, ensuring comprehensive financial security for the future. Another plus point is the exemption from premium payments as soon as one draws pension benefits, significantly reducing the financial burden during times of disability. However, it should be noted that this insurance can only be concluded when fully able to work.
How meaningful is disability insurance?
No one is protected from life's uncertainties. Whether young or old, employed or self-employed, family or individual - a disability can cause significant financial gaps. Often, benefits from state and company provisions are insufficient to maintain the previous standard of living.
In particular, people not tied to a pension fund risk provision deficits in case of disability. This includes, for example, students, self-employed individuals, and mothers and fathers who are not employed. Likewise, those who have withdrawn funds from their occupational provision for home ownership may face income deficits.
What are the main causes of disability?
91% of disability cases are due to illnesses, with mental illnesses accounting for 49%, the largest portion. Bone and musculoskeletal diseases account for 12%, and nerve diseases 9%. Other causes include accidents (6%) and birth defects (13%).
To what extent is the disability pension paid?
This pension supplements the benefits from state and company provisions. The amount paid varies depending on the degree of disability. Insured individuals receive full pension for a disability of at least 70%. For lesser disability (25-69%), the pension is adjusted accordingly.
How does disability pension integrate into the 3rd pillar?
The disability pension in the 3rd pillar is a pure risk insurance without capital formation. This allows for affordable premiums and offers the option to take out the insurance in either pillar 3a or 3b. Especially for people who already max out their contributions in pillar 3a, pillar 3b is an attractive option.
If you're interested in a disability pension or have other questions about your pension planning, insuris offers personal advice. Contact us here to arrange a discussion with experts from the insurance industry.