Disability Insurance in Germany: The Definitive Guide

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:

It provides long-term protection, paying benefits for life or until retirement, depending on your policy.
You decide the benefit amount (with no upper limit), which offers more flexibility than standard health insurance.
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)

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 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.