Different pillars of protection
Secure your accustomed standard of living privately at an early stage
In order to maintain your accustomed standard of living it is worth taking out private coverage in the form of disability insurance. This enables you to protect yourself and your dependents from financial losses, and ensure that you and your family can remain in your own home, pay the mortgage and meet your financial obligations. The crucial thing is to be well aware of your own financial situation at every stage of life and to know how you can influence it. Here you will have to ask yourself a number of questions:
- Partner: When it comes to financial security in the event of disability or death, it is important to think about your partner as well. Are you married or cohabiting? Do you have children together? Does one partner only work part-time or not at all? All this influences your financial situation and your family's cash requirements. If one partner takes care of the children and the family, it is particularly important to provide well for both partners as you could face considerable additional costs for child care. Single parents are particularly hard hit, so it pays to have good insurance.
Good to know: By law, social security benefits are only paid to married couples in the event of death and only if certain conditions are met. Depending on the pension fund regulations, it is possible to designate unmarried partners as beneficiaries in the second pillar. In pillar 3b, on the other hand, beneficiaries can be designated as desired.
- Homeowners: Your home provides security and stability, particularly in exceptional life situations. A reliable income is particularly important for homeowners to cover current housing costs. So it pays to have additional insurance. In the event of death, the home remains affordable for the surviving dependants and a move can be avoided, thanks to the risk coverage of a life insurance policy.
Good to know: Disability can be insured together with term life insurance in the same policy, thus saving premiums.
- The self-employed: Are you self-employed and not affiliated to a pension fund? This means that benefits will be minimal in the event of disability. You must reckon with significantly less than 60 % of your previous salary. If the surviving dependants after an event of death are entitled to claim OASI benefits, these will usually be just a mere fraction of previous income. It generally pays for people without a pension fund or with a minimal pension fund solution to take out additional insurance.
- Young people: They have their whole life ahead of them and disability is particularly hard on them – not only emotionally, but also financially. Education and training, nursing care costs and reintegration measures are expensive. However, the benefits provided by state retirement provision are low at this age, which can lead to long-term financial hardship. Additional insurance coverage makes sense.