Everything you need to know about the subsequent insurance guarantee and dynamics in occupational disability insurance

Occupational disability insurance is an important building block for your financial security. With a subsequent insurance guarantee and dynamics, you can react flexibly to changes in your life and protect yourself against inflation. Here you can find out all about its features and benefits so that you are perfectly prepared for an emergency and can go about your life with peace of mind.

Importance of the subsequent insurance guarantee and dynamics in occupational disability insurance

Life presents us all with unforeseeable risks and dangers. Unfortunately, it is always possible to fall seriously ill or have an accident. In such cases, it is usually not possible to continue working, which can lead to a loss of income and financial difficulties. Occupational disability insurance (BUV) protects you against this. If you take out disability insurance, you pay premiums for as long as you work and in return receive a pension specified in the contract as soon as you become unable to work.

Because occupational disability insurance usually runs for a very long time, your life circumstances are likely to change during the term. The long term also brings with it the possibility of inflation. In order to be able to react to these variables, occupational disability insurance policies offer dynamics and subsequent insurance guarantees.

Subsequent insurance guarantee: definition and advantages

The subsequent insurance guarantee is a clause in an occupational disability contract. It is used to increase the premiums and benefits of your occupational disability insurance in the event of changes in your life. The biggest advantage of this is that the adjustment is possible without a health check. So if, for example, you fall ill between taking out the contract and using the supplementary insurance guarantee, you can still adjust your occupational disability insurance.

There are two different types of subsequent insurance guarantee: the event-related and the non-occasion-related subsequent insurance guarantee.

The non-occasion-related subsequent insurance guarantee means that you can increase your premiums and therefore also the amount of your pension by leaps and bounds under the conditions specified in the contract. This is usually subject to a certain period of time and a limit on the amount of the adjustment.

The event-related subsequent insurance guarantee means that you can increase your premiums and benefits on certain occasions specified in the contract. These are mainly events that lead to a change in your standard of living and you therefore have an interest in adjusting your pension. It is important to note that an adjustment must be made within a contractually stipulated period as soon as an event occurs. Furthermore, even with this form of subsequent insurance guarantee, the premiums and pension cannot be increased at will, but only up to a certain amount that varies depending on the contract. Some typical reasons are as follows:

• Marriage
• Birth of a child
• Completion of a course of study or vocational training
• Increase in salary above a certain percentage
• Reaching the age of majority
• Start of economic self-employment

Regardless of the form of the supplementary insurance guarantee, when using the entitlement to an increase in occupational disability insurance, the existing contract is not changed, but an additional contract is set up. In most cases, the pension cannot be increased indefinitely, but only up to a certain percentage of your gross salary.

Dynamics in disability insurance: what is it and how does it work?

Dynamics is another aspect of an occupational disability insurance contract. Its main purpose is to compensate for inflation, which usually occurs during the long term of a disability insurance policy. Inflation can result in a pension maintaining the same amount, but with less and less purchasing power over time. Purchasing power indicates how much you can buy with your money.

Here, too, there are two types: dynamic contributions and dynamic benefits.

The contribution dynamic refers to a process in which the contributions to your pension increase by a certain percentage each year. This is usually between one and three percent. As you pay more contributions, the amount of your pension also increases. Accepting the increased contributions is not an obligation, but a right. However, the number of consecutive contribution increases you can suspend is limited. In most cases, the limit is two years. If you suspend the premium increase after this period, you will no longer be able to use the premium dynamic.

A special form of premium dynamics is that the increase in the pension is based on the loss of purchasing power. In this case, the insurance company reviews purchasing power annually, for example, and adjusts your contributions accordingly.

There is a special feature to note with dynamic contributions: Your benefits in the event of occupational disability do not increase by the same percentage as your premiums. This is because the existing contract is not changed, but an additional contract is set up each time. Because you are at least one year older with each increase, your basic premium is also slightly higher, although the basic benefits remain the same apart from the premium dynamic. So you have additional costs because you are older and because you use the dynamic. However, your benefits only increase due to the dynamic.

The benefit dynamic only comes into effect if you have already become incapacitated for work. If a benefit dynamic is agreed when the contract is concluded, your premiums will be higher from the outset. In contrast to the premium dynamic, they do not increase annually. In return for paying higher premiums from the outset, your pension increases by a certain percentage each year as soon as you become incapacitated for work.

Differences between the subsequent insurance guarantee and the dynamic

Now that you have an overview of the supplementary insurance guarantee, the dynamic and their different forms, you will find a summary of the similarities and differences below.

• The similarities between the subsequent insurance guarantee and the dynamic are:
• They must be defined at the start of your contract.
• You can use them to increase your contributions and benefits without having to undergo a new health check.
• They help you to adapt your pension to changes in your life and the world.
• The subsequent insurance guarantee has some special features that distinguish it from the dynamic:
• It usually requires an occasion in order to be used.
• It enables large leaps in the adjustment of premiums.

The terms and conditions of the subsequent insurance are determined at the start of the contract. However, you yourself are responsible for using them within a certain period of time after the occasion has arisen.

• It is mainly used to adjust your occupational disability insurance to changes in your life.
• The dynamic differs in the following ways:
• Your premiums and benefits do not increase by leaps and bounds, but slowly and evenly.
• With dynamic premiums, you are given the choice at regular intervals as to whether you want to use them.
• If you suspend the premium dynamic too often in succession, your right to use it expires.
• No form of dynamic needs a special reason to be used by you.
• The main purpose of the dynamic is to compensate for inflation.

Important factors when choosing an occupational disability insurance policy with a subsequent insurance guarantee and dynamics

When taking out occupational disability insurance, you can usually decide to include dynamics and a subsequent insurance guarantee in the contract. There are a few factors and tips that you should consider when choosing the right insurance for you:

• Amount of basic premiums and benefits: They provide the foundation on which you build with supplementary insurance and dynamics.
• Customer service: Compare experience reports and find out about the insurer's availability. Because the subsequent insurance guarantee in particular is intended to be used on special occasions, it is important that you have a helpful customer service team at your side in the event of problems or questions.
• In addition to these general aspects, you should also consider tips that are specifically related to the subsequent insurance guarantee:
• Check the occasions when you can take advantage of the additional insurance guarantee.
• Find out about the maximum increase in premiums and benefits per supplementary insurance.
• Find out the deadlines for claiming the supplementary insurance guarantee.
• Make sure that subsequent insurance is possible without a new medical examination.

You should consider the following aspects with regard to the dynamic:

• If you are offered a premium dynamic, you should always include it in your contract. The increase in premiums is not an obligation for you, but a right.
• The number of times you can suspend the premium dynamic in succession can vary.
• With dynamic premiums, pay attention to the percentage increase in premiums per year and whether you can afford the increase over the long term.
• Finally, you should also be aware of current trends and developments in occupational disability insurance. That way, you know how your insurance may develop in the future:
• More prevention: many insurers are trying to prevent their customers' occupational disability through advisory services or other benefits.
• Individual risk assessment: Premiums and benefits are becoming increasingly individualized. Depending on your state of health and lifestyle, this can be either good or bad for you.
• Digitalization: You can expect more and more aspects of your insurance, such as customer service, to be handled via digital channels like apps.
• Shorter terms: Even though disability insurance pretty much always has a term of at least ten years, there is a tendency for the minimum term to get shorter and shorter. As a result, more and more affordable insurance policies are coming onto the market.

How young adults can make the right decision

Occupational disability insurance is an important building block for safeguarding your standard of living in the event of occupational disability. With a subsequent insurance guarantee and a premium or benefit dynamic, you can increase the benefits of your disability insurance after taking out the policy without having to undergo a new health check. When deciding on an occupational disability insurance policy with a subsequent insurance guarantee and dynamic, you should pay particular attention to factors relating to the conditions of the premium increase and the associated increase in benefits. This way, you can protect yourself in the event of an emergency and don't have to worry about changes in purchasing power due to inflation or a rigid contract that no longer fits your life situation at some point.