medium_Is-disability-insurance-worth-it.png

small_Is-disability-insurance-worth-it.png

thumbnail_Is-disability-insurance-worth-it.png

Is-disability-insurance-worth-it.png

Is disability insurance worth it in 2026? A look at the data.

Work is essential. 


It keeps life moving—paying the bills, feeding your family, and allowing you to enjoy your passions. 


But what happens if, one day, you can’t work anymore? Imagine injuring your back, burning out, or becoming permanently disabled. 


What happens to your income then? 


Government benefits might help, but they fall short of maintaining your lifestyle.


Here’s the thing: German welfare programs have limits. 


As of 2025, the maximum you could receive ranges from **€35,647\.50 to €53,471\.25 per year**, depending on your level of disablement. 


That’s not terrible, but it’s hardly enough for vacations or saving for your kids’ education. 


Plus, what you’re eligible for depends on how long you’ve been paying into the system, which isn’t great news for newcomers to Germany.


So, what’s the solution? [Disability insurance](https://feather-insurance.com/disability-insurance)**.**


Also known as [income protection insurance](https://feather-insurance.com/income-protection-insurance), it’s like a safety net for your paycheck. 


If you cannot work (due to being at least 50% disabled), this insurance will replace a portion of your income—an amount you can choose when setting up your policy. 


But is disability insurance worth it? After all, what are the chances of something serious happening? 


Let’s find out.


## What are the pros and cons of disability insurance?




| **Pros** | **Cons** |
| --- | --- |
| **Financial security:** Disability can strike anyone at any time. Disability insurance helps you cover essential expenses. | **Cost:** Disability insurance is not cheap. Premiums typically range from 2% to 3% of your annual income, but they can be higher if you have a risky job, are older, or want more comprehensive coverage. |
| **Peace of Mind:** Knowing that you’ll still have money coming in if you’re unable to work can reduce stress. This is especially important if others, like spouses or children, depend on your income. | **Exclusions and limitations:** Policies may not cover pre\-existing conditions or specific types of disabilities. Some also define “disability” strictly, making it harder to qualify for benefits. |
| **Customizable coverage:** Many disability insurance allow you to tailor coverage to fit your needs and budget. For example, you can choose the benefit amount, waiting period (how long before payments start), and coverage duration. | **Waiting period:** Most policies include a waiting period (usually 30\-90 days) before benefits kick in. This can leave you with a gap in income unless you have savings to cover that time. |
| **Retirement savings:** You can use your payouts toward private retirement plans. This ensures your savings continue growing, even if you’re not working. | **Age limits on benefits:** Benefits typically stop at retirement age, around 67 for most plans. Some policies may cut off payments earlier, depending on their terms. |
| **Dynamic premiums:** Some policies offer an optional feature called dynamic premiums, which allows your coverage to grow over time. By opting in, your premiums automatically increase by 3% each year, and your coverage also increases. This ensures your benefits keep pace with rising living costs or growing financial needs. | **Complexity:** Insurance policies are often filled with legal terms and detailed conditions. It can be confusing to compare options and fully understand what you’re signing up for. But [we’re here to help](https://feather-insurance.com/support). |
| **It kicks in quickly:** You won’t have to fight with the social security office, which can take ages and might not even provide enough support. |  |



## How popular is disability insurance in Germany


Disability insurance in Germany is relatively popular, with about [40% of households having coverage](https://www.aerzteblatt.de/archiv/48544/Portfolio-Viele-sind-schlecht-oder-falsch-versichert). This figure highlights that many people recognize its importance, but there’s still room for more widespread adoption.


### Who tends to buy disability insurance?


1. **Young people**Disability insurance appeals to young workers because they have many years of potential earnings ahead, and it’s most affordable for them. This insurance can replace their income for most of their missed career.
2. **Primary providers**If you’re the main breadwinner for your family, losing your ability to work could create serious financial challenges. Disability insurance ensures your family can maintain their lifestyle.
3. **People in high\-risk jobs**Jobs with physical demands, like construction or healthcare, come with higher risks of injury. For these workers, disability insurance is vital.
4. **Caregivers**If you have dependents—like elderly parents—disability insurance provides a safety net.


Losing your ability to work doesn’t just affect you; it can impact your entire household. Disability insurance fills the gap, replacing lost income so you can still cover living costs, debts, and retirement goals.


## What does disability insurance actually cost in Germany?


Disability insurance in Germany typically costs **2% to 3% of your income**. The exact amount you pay depends on a few key factors, so let’s break it down step by step:


1. **Age**: Younger people pay less because they are seen as having a lower risk of developing a disability.
2. **Coverage amount**: The higher your monthly income you want covered, the higher your premium will be. For example, insuring €2,000 per month costs more than €1,000 per month.
3. **Health status**: Insurers assess your health, often using your Body Mass Index (BMI) or medical history. Good health lowers costs, while health issues raise them.
4. **Profession**: Risky jobs (e.g., in healthcare) usually cost more to insure than office\-based jobs because they have a higher chance of injury.
5. **Length of coverage**: Policies that extend coverage into later years are more expensive than short\-term plans.
6. **Concrete vs. abstract referral clause**


This one takes a little more explaining. Concrete referral means the insurance can only suggest a new job (and thus stop paying your benefits) if it closely matches your:


- **Skills**
- **Experience**
- **Previous salary**
- **Social standing**


However, an abstract referral means the insurance company considers whether you can work in any job, regardless of your previous field or experience.


For example, if a salesperson injures their back and can’t drive to meet clients, the insurance might offer them an office job with the same salary. Since this job matches their skills and experience, they would have to accept it—this is called a concrete referral.


However, if the insurance company offers an entirely different job, such as cashiering, it can only make you take it if your policy allows abstract referrals.


### **Typical costs for a 30\-year\-old healthy individual:**


Below is an idea of how monthly premiums might look based on desired coverage amounts:




| **Monthly** **coverage** | **Monthly cost (€)** |
| --- | --- |
| €3,000 | €96\.49 |
| €2,500 | €80\.83 |
| €2,000 | €65\.16 |
| €1,500 | €49\.50 |
| €1,000 | €33\.83 |
| €500 | €18\.17 |


## What disability insurance pays for


By law, disability insurance will payout once you’re 50% or more disabled.


This means that you either can’t work for 50% of the workweek — ie, 20 hours or more— or can’t do 50% of the tasks assigned to you by your employer.


Depending on your insurer, it’ll either be your own doctor or one specified by your insurance who will determine your degree of disability. 


In 2025,  these are the most common **reasons for disability:**


1. **Mental health**: 34%
2. **Skeleton and musculoskeletal system**: 20%
3. **Cancer and malignant ulcers**: 17%
4. **Other**: 15%
5. **Accidents**: 7%
6. **Heart and vascular system**: 6%


## When does disability insurance become worth it?


Disability insurance becomes worth it when you think about what’s at stake: your ability to earn a living.


Your income is likely your most valuable asset, especially if you’re young. It fuels everything—your savings, investments, and daily expenses. Losing it due to injury or illness could be devastating.


**Let’s look at some numbers:**


Covering €3,000 of monthly income costs around €96\.49 per month. If you face an “average length disability” (about 82 months), the total payout would be €246,000\. That’s 212 years’ worth of premiums.


Plus, disabilities are more common than you think.One in four people will face a disability during their career. It’s not just freak accidents—chronic illnesses, injuries, or even stress\-related conditions can make working impossible for months or years.


Many policies continue paying until retirement if you can’t return to your original job. For example, if a surgeon develops a hand injury and can’t operate anymore, their policy might still pay out—even if they switch to a desk job.


Some advisors even argue disability insurance should be a higher priority than maxing out retirement accounts. 


Why? 


Because if you lose your income, you can’t contribute to those accounts in the first place.


## What to watch out for when buying disability insurance


Most policies follow strict government laws, so they’re similar in many ways. However, there are still important factors to consider to ensure you get the best coverage.


First off, here’s what stays the same across all policies:


### 1. When Payments Begin


Payouts usually start if you are at least 50% disabled. This means you’re unable to perform at least half of the tasks required for your job, or can’t work for half of the work week.


### 2. Policy Cancellation


Insurers cannot cancel your policy after you claim benefits. Even if you receive benefits for years and later return to work, the insurer must honor the contract as long as you keep paying your premiums.


### 3. Premium Increases


Insurers can raise your premiums anytime, even doubling them in one year. This makes choosing a trusted company especially important.


Now that’s out of the way, let’s look at the key differences to consider when choosing your insurance company:


## Concrete vs. abstract job referrals


**Concrete referral:** The insurer can only stop your benefits if they find you a job that matches your skills, experience, previous salary, and social standing.


**Abstract referral:** The insurer can suggest any job, even one unrelated to your previous work or experience.


**Why it matters:** A concrete referral policy is much better because it ensures you’re not forced into unsuitable jobs. The cost difference is usually small, but the benefits are far greater.


## Additional coverage options


Some policies let you add features like:


**Care pension:** A monthly payment if you need nursing care.


**Serious illness payment:** A lump sum payout if you suffer a major illness like a heart attack or stroke.


Not all companies offer the above, while others offer other types of benefits. It’s worth shopping around to see if a certain add\-on is particularly important for you.


## When payments end


Standard policies pay until age 67, which is the usual retirement age. Cheaper policies may stop payments earlier, usually at 63 or 64\.


**Best Option:** Choose a policy that adjusts to any future increases in the retirement age. For example, if the government raises it to 70, your benefits will also last until 70\.


## How to choose the right disability insurance company


When picking your disability insurance, these are the four main factors to consider:


- **Reputation and trust:** Since insurers can raise premiums, trust is crucial. Look for companies with a history of fair pricing and good service.
- **Customer reviews:** Check reviews to see how the company treats its customers, especially when handling claims.
- **Support services:** Ensure the insurer offers clear communication and support in your preferred language.
- **Recommendations:** Ask friends and family for their experiences and suggestions.







## Final thoughts: Is disability insurance worth it?


That brings us to the end of our discussion on whether disability insurance is worth it in Germany.


Here’s what you should remember:


Disability insurance is a valuable investment for many people. It’s especially helpful if your policy has features like an abstract referral and coverage that lasts until retirement—or even longer if the law changes.


While the cost difference between basic and more comprehensive policies is often small, those extra features could make a massive difference if you ever need to rely on your insurance.


Overall, it’s smart to consider disability insurance if you’re early in your career or have big financial responsibilities, like a mortgage or a family to support.



Sign up for disability insurance

Amazing from start to finish

Perfect for expats in Germany

Always helpful in a pinch.

Other policies

[BP] is disability insurance worth it

couple exploring life and disability insurance policies

medium_Life or disability.png

small_Life or disability.png

thumbnail_Life or disability.png

Life or disability.png

How disability insurance works in Germany

This is a detailed guide to disability insurance in Germany for 2025\.


Today, you’ll learn everything you need to know about “Berufsunfähig­keitsversicherung” (a bit of a mouthful, we know…), including:


- What it is
- How it works
- How much it costs
- If it’s worth it
- And more…


Let’s dive right in.


## What is disability insurance?


Disability insurance is a type of coverage that provides financial support if you’re unable to work due to injury or illness. Essentially, it replaces a portion of your income when you’re not physically able to earn it.


It’s got two main advantages:


### 1. Income replacement


It provides money to help cover your expenses when you can’t work because of a disability. If you have dependents—family members or others who rely on your income—disability insurance ensures they’re taken care of if you’re unable to provide.


### 2. Protecting Yourself


It reduces the financial risk of losing your income unexpectedly, ensuring you’re not left struggling to pay bills or manage daily needs. Even if you don’t have dependents, it protects you from financial strain, ensuring you can cover essentials like rent, groceries, and medical expenses during tough times.


## How does disability insurance work with public or private health insurance?


Both public and private health insurance offer financial support if you cannot work due to illness or injury. 


Your employer continues to pay your full salary for the first six weeks. After that, health insurance takes over, covering 70% of your salary (up to €120\.75 per day) for up to 78 weeks.


Disability insurance is different in 3 key ways:


1. It provides long\-term protection, paying benefits for life or until retirement, depending on your policy.
2. You decide the benefit amount (with no upper limit), which offers more flexibility than standard health insurance.
3. It can cover the cost of health insurance (which you’ll still have to pay if you are unable to work).


## How does disability insurance work?


As we just mentioned, disability insurance works by providing financial protection if you are unable to work due to an injury or illness. 


Here’s how it works:


### 1\. Premiums


You pay a regular amount (called a premium) to maintain coverage. If your policy is part of your employment benefits, your employer pays the premium.


This payment ensures the policy stays active. The premium depends on your lifestyle, but more on that in a minute…


### 2\. Benefits


In exchange for paying premiums, the insurance provides a **monthly payment** if you’re unable to work due to disability. 


This amount typically covers **60\-80% of your monthly salary**.


### 3\. When does disability insurance pay out?


- **Eligibility Criteria**:
	- **Degree of impairment** (e.g., at least 50% impairment)
	- **Duration of impairment** (e.g., impairment lasting at least six months)
- **Coverage Terms**:
	- **Scope of coverage** (e.g., whether it covers occupational or any form of disability)
	- **Maximum payment period** (e.g., up to the statutory retirement age, such as 67 years)


The exact terms vary from one policy to the next, so double\-check the actual requirements with your insurer. These are just examples.


### 4\. What qualifies as a disability?


This depends on the plan and provider you select. Generally, there are two types of policies:


- **“Own\-occupation”**: This means you’re considered disabled if you can’t do your specific job.


For example, if you’re a surgeon and lose the use of your hands, you qualify because you can’t perform your job, even if you could technically work in a different profession.


- **“Any\-occupation”**: This is stricter. You can only claim benefits if you cannot perform **any job** for which you’re reasonably qualified.


So, using the same example, you’d only qualify if you couldn’t perform any job, not just as a surgeon.


There are also **different levels of disability** that your policy might cover you for:


- **Total disability**: You’re completely unable to work in any capacity.
- **Partial disability**: You might still work part\-time or in a limited role, but benefits could be adjusted accordingly, paying you a reduced amount based on what you’re still able to earn.


### What are the most common reasons for disability? (2025 data)


![Reasons for disability pie chart — 2024 statistics](https://storage.googleapis.com/popsure-blog-content/1/2024/10/reasons-for-disability-1024x536.png)
## Who needs disability insurance?


Disability insurance makes sense for many people. Towards the end of the article, we’ll teach you how to determine if disability insurance is worth it.


However, for some people, this product is a no\-brainer…


### Primary providers


If you’re the main or only source of income for your family, losing your ability to work could put them in a tough spot. 


This insurance ensures that your earnings are replaced, allowing you to continue providing for your loved ones.


### Those with high\-risk jobs


You’re at a higher risk of injury if your job requires physical labor. For example, construction workers, athletes, or healthcare professionals face more physical challenges than desk workers. 


Disability insurance can cover lost wages if you’re injured and cannot to continue working in such roles.


### Caregivers


If you have children, elderly parents, or others depending on your financial support, disability insurance is essential. They rely on your income, and any interruption could seriously affect their well\-being. 


This insurance ensures they’ll still be taken care of, even if you’re unable to work. 


## What’s covered by disability insurance?


Disability insurance covers a range of conditions that could prevent you from working. These can be physical, mental, or related to long\-term illnesses. For example:


- **Acute injuries**: Sudden injuries like broken bones or spinal injuries are usually covered.
- **Pregnancy complications**: Sometimes, pregnancy can lead to complications that require time off work, and in many cases, disability insurance can cover this period.
- **Chronic pain**: Long\-term pain, such as back pain or arthritis, can make it hard to work. If these conditions become severe enough that you need time off, you’ll be covered.
- **Serious illnesses**: Conditions like cancer, diabetes, or heart disease will be covered during treatment or recovery.
- **Sensory loss**: Disabilities like losing your sight or hearing can significantly affect your ability to perform certain tasks, and these are generally covered under most disability insurance policies.
- **Depression and PTSD**: If mental health issues like depression or Post\-Traumatic Stress Disorder (PTSD) are severe enough to keep you from working, disability insurance can step in to provide financial relief.


## How much does disability insurance cost in Germany?


On average, disability insurance costs between 1% and 3% of your annual salary. For young adults, “occupational” disability insurance costs around €50 per month. 


However, as you age or if you work in a high\-risk profession, this cost can increase to €100\-€150\+ per month. Here are the factors that will impact your premiums:  



- **Age:** The younger you are, the cheaper your premiums. Insurers consider younger people less likely to become disabled.
- **Occupation:** If you work in a physically demanding or risky job (e.g., construction or nursing), your premiums will increase because you’re at a greater risk of injury.
- **Benefit Amount and Length:** The cost will go up if you want a higher monthly benefit or longer coverage period.


## Is disability insurance worth it?


Disability insurance is usually worth it. Especially when you consider how important your earning potential is. Here’s why:


### 1. Your earning potential is your biggest asset


When you’re young, your ability to earn money is one of your biggest assets. Think of it like the foundation of your financial future. Disability insurance protects about 60\-80% of your income if something happens to you, all for a relatively low cost—around 1\-2% of your salary.


For higher\-income earners, disability insurance is even more important because it ensures long\-term financial stability if they can no longer work.


### 2. Risk management
Most people don’t think about what would happen if they couldn’t work due to illness or injury. However, losing your income could cause serious financial problems, especially if you’re unable to return to work for an extended period. Disability insurance helps manage that risk by ensuring you still have money coming in, even if you can’t work for a while.


### 3. Income protection


While disability insurance doesn’t fully replace your salary, it provides enough [income protection](https://feather-insurance.com/income-protection-insurance) to cover your basic needs. This can be crucial, as waiting for social security disability benefits can take a long time and might not cover enough. 


## How much disability insurance coverage is best?


When deciding how much disability insurance coverage is best for you, it’s important to consider several factors to ensure you’re well\-protected but not overpaying. 


Here’s a breakdown of what to keep in mind:


### Income replacement


Disability insurance typically replaces between 40% and 80% of your income. It’s rare to find policies that cover 100%, so you’ll need to figure out how much of your salary you actually need to live comfortably. 


For most people, replacing about 60% of their income is a good balance, but it varies depending on your situation.


### Current expenses


Look at how much you actually spend each month, not just how much you make. 


To calculate this, take your monthly paycheck and subtract any money you set aside for savings. 


What’s left is your true monthly expense. This number is key because it represents what you’ll need to cover if you’re unable to work.


### Spending reductions


If you no longer commute to work or buy work\-related items (like lunches or professional clothes), your expenses might go down. 


Also, disability benefits are usually taxed at a lower rate, which means you may need less than you think. 


Another option is moving to a less expensive area since your job no longer requires you to work in a specific location.


### Spousal income


If you have a partner who works, they may be able to take on more hours or a higher\-paying role if you cannot work. 


You may also be able to take over more household responsibilities, which could reduce the need for outside help like childcare, giving your partner more flexibility to increase their income.


### Other income:


If you have savings, rental income, or another steady source of money (not including retirement savings), you can factor that in as well. 


This additional income can lower the amount of disability coverage you need.


### How to calculate how much disability insurance benefit you need


To figure out the least amount of coverage you’ll need, you can use this simple formula:


**Current monthly expenses – Reduced spending – Other income \= Minimum required disability benefit.**


## How do you get disability insurance?


Getting disability insurance involves a few simple steps. Here’s how it works:


### 1. Provide personal information


First, you’ll need to share some basic details, like your date of birth. This helps insurance companies assess your age\-related risks and give you an accurate quote.


### 2. Describe your job and situation


Next, you’ll be asked about your current occupation, job title, and net income. This information helps the insurer understand what kind of work you do and how much income you want to protect. People in high\-risk jobs, like construction, may have different coverage needs than office workers.


### 3. Share your health details


You will need to provide your height and weight. This information is essential because insurers look at your overall health when deciding how much your premiums (the insurance cost) will be. People with certain health conditions might pay more, while healthier individuals often pay less.


### 4. Select your coverage


After providing your details, you’ll choose the type of disability insurance that fits your needs. You’ll have to decide things like:


- How much of your salary will be replaced (often 60\-80%)
- How soon the benefits will kick in (the waiting period)


### 5. Get a quote


Once you’ve filled in your details and chosen your coverage, the insurance company will give you a quote. This tells you how much the insurance will cost. 


You can (and should) compare quotes from different companies to find the best deal. 


But be careful; the best deal is usually not the cheapest one. 


### 6. Get covered


If you’re happy with the quote, you can go ahead and apply. After approval, your disability insurance will be active, and you’ll have peace of mind knowing you’re protected if you ever can’t work due to a disability.

[BP] disability insurance germany guide