Child Disability Insurance (Kinderinvaliditätsversicherung)

Scope of Cover

Child disability insurance responds where a child becomes permanently disabled as a result of an accident or – unlike pure child accident insurance – an illness. In Germany the benefit trigger is usually the official determination of a degree of disability of at least 50 under SGB IX; other tariffs rely on the degree of disability under a schedule of disability percentages or on a catalogue of serious illnesses. The benefit is provided as a one-off capital sum (conversions, aids, care), as a lifelong monthly annuity, or as a combination. Because illnesses – such as cancer, neurological disorders or consequences of infections – cause disability in children far more often than accidents, the real added value lies in the illness cover.

Critical Parameters and Exclusions

Illness cover requires medical underwriting; pre-existing conditions, congenital disorders and frequently mental illness are excluded or subject to waiting periods, and cover can usually be taken out only from a minimum age of a few months. Points to check are the benefit trigger (degree of disability, schedule, care grade), notification periods, the expiry age of cover (often 18 or 25) with a conversion right into adult cover, and the treatment of contributory shares for prior conditions. Market practice in Germany follows the GDV model conditions KIV 2014: the insured event is an impairment lasting more than six months with an officially determined degree of disability of at least 50, the benefit is paid as a monthly annuity from the month the application is filed with the pension office, disability existing before inception is uninsurable, and neuroses, personality disorders and psychoses are excluded unless caused by an accident, organic brain disease, poisoning or infection. An example from practice is a tariff that can be taken out from the U3 check-up until age 16, ends at age 18 and waives the addictive-substances exclusion for children under ten. Because assessing disability in children takes particular time, accident conditions extend the reassessment period for children from three to five years.

Interfaces with Social Insurance and Private Accident Insurance

Because children have no earned income, social insurance provides only limited benefits in the event of disability: Swiss invalidity insurance covers medical measures for congenital defects and pays pensions only from age 18, while German and Austrian social insurance supports children essentially through care allowances and rehabilitation. Private child accident insurance covers accidents only, which statistically cause less than a tenth of severe disabilities in children; child disability insurance closes this gap and is increasingly positioned in advice as an alternative or supplement.

Comparison and delineation

Child disability insurance is an alternative and supplement to general private accident insurance taken out for a child: the accident-only cover is cheaper and needs no health declaration, but it misses the illness-driven majority of childhood disability causes that the dedicated child disability product captures. Advisers therefore frequently recommend child disability insurance instead of, or in addition to, a child’s accident policy wherever medical underwriting allows, since the illness trigger is where the real protection gap lies.