Daily Sickness Benefit Insurance (Krankentagegeldversicherung)
Daily sickness benefit insurance pays an agreed daily benefit during incapacity for work due to illness or accident, to compensate for the resulting loss of income, typically after a deferred period has elapsed.
Comparison profile
- Trigger
- Indemnity
- Insured interest
- The insured's loss of income arising from medically certified incapacity for work due to illness or accident.
- Rating basis
- Age at inception, Occupation and occupational class, Agreed daily benefit amount, capped at net income, Chosen deferred period (Karenzzeit), Health declaration
- Typical limits
- The daily benefit is typically capped at the insured's actual net income to avoid over-indemnification, and commonly bridges the gap between statutory or employer wage continuation and long-term disability cover.
- Typical deductibles
- A deferred period (Karenzzeit) of typically a few days up to several weeks or months applies before benefit payments start, chosen to coordinate with statutory wage continuation.
- Target segments
- Self-employed individuals, Employees without or with limited employer wage continuation, SME owners
Insured events
- Incapacity for work certified by a physician due to illness
- Incapacity for work due to accident, where not covered by mandatory accident insurance
- Hospitalisation-related incapacity for work
Key exclusions
- Incapacity from war and civil unrest
- Self-inflicted incapacity or intoxication
- Incapacity existing at policy inception (undisclosed pre-existing conditions)
- Incapacity already covered by mandatory accident insurance benefits
- Incapacity within the agreed deferred period
Concept
Daily sickness benefit insurance covers the loss of income arising from incapacity for work due to illness or accident, with the insurer paying a contractually agreed daily benefit for the duration of medically certified incapacity. It is aimed particularly at self-employed individuals and others whose income during illness is not protected by employer-paid continued wages or statutory benefits.
Deferred Period and Benefit Duration
The amount of the daily benefit and the start of the insurer’s payment obligation (the deferred period) are individually agreed by contract and frequently coincide with the point at which statutory continued wage payment or sickness benefit entitlement ends. The benefit duration is generally unlimited as long as incapacity for work is medically certified and no permanent occupational disability exists.
Distinction from Disability Insurance
Unlike disability insurance, which requires a permanent inability to perform one’s occupation, daily sickness benefit insurance already covers temporary, medically certified periods of incapacity for work; in practice, both types of insurance are frequently used complementarily to cover both short-term and permanent loss of income.
Comparison and delineation
Daily sickness benefit insurance complements occupational disability insurance by covering the earlier, temporary phase of income loss that disability insurance is not designed to address: it responds to any medically certified incapacity for work, however short, while disability insurance requires a foreseeably permanent inability to continue the last occupation. The two are typically layered, with daily sickness benefit insurance bridging the period until either recovery or a permanent disability determination, at which point disability insurance benefits take over.