Disability
Disability: 3 technical terms explained – definition, synonyms and legal basis.
Premium Waiver
Synonyms: Beitragsbefreiung
A premium waiver relieves the policyholder of the obligation to pay further premiums while coverage continues unchanged to the agreed extent.
Concept
A premium waiver relieves the policyholder of the obligation to pay further premiums upon the occurrence of a defined event — frequently the occupational disability or death of the premium payer — while coverage continues unchanged to the agreed extent.
Use Cases
Premium waivers are frequently included as an add-on benefit in life, annuity, and education endowment policies in the event of the policyholder’s occupational disability, and in education endowment policies in the event of the death of the premium-paying parent.
Distinction from Standalone Waiver of Premium Insurance
A premium waiver as an included benefit component must be distinguished from standalone waiver of premium insurance, which as a separate contract has as its sole purpose taking over the premium payments of another insurance contract when a covered event occurs.
Occupational Class Rating
Synonyms: Berufsgruppeneinteilung
Occupational class rating assigns occupations to risk classes based on their risk profile, which significantly determines premium levels in disability and accident insurance.
Concept
Occupational class rating assigns individual occupations to specific risk classes based on their physical, psychological, and industry-specific risk profile, which is a key determinant of premium calculation in occupational disability and accident insurance.
Rating Criteria
Key rating criteria include the proportion of physical versus mental work, exposure to hazardous substances or activities, the statistical occupational disability risk of the occupational group, and increasingly also academic qualification and managerial responsibility.
Relevance for Pricing
Since physically demanding or hazardous occupations carry a significantly higher occupational disability risk than predominantly mental work, an unfavorable occupational class rating leads to substantially higher premiums or, in extreme cases, to application decline; in practice, insurers can differ considerably in how they classify individual occupations.
Occupational Disability
Synonyms: Berufsunfähigkeit
Occupational disability exists when an insured person is, for the foreseeable long term, unable to continue practicing their most recently and specifically held occupation due to illness, injury, or loss of strength.
Concept
Occupational disability, in the insurance sense, exists when the insured person is, for the foreseeable long term, unable to continue performing their most recently and specifically held occupation as it was structured while healthy, or can only perform it to a limited extent defined as a minimum threshold in the policy terms.
Prognosis Period and Proof
Private occupational disability insurance typically requires that the impairment is expected to last continuously for at least six months, or has already lasted continuously for six months. Proof is regularly provided through medical reports and a detailed description of the duties of the occupation most recently held.
Concrete versus Abstract Referral
A key feature of good occupational disability policy terms is the waiver of abstract referral, under which the insurer could otherwise refer the insured person to a different occupation suited to their prior training and social standing, without that occupation actually being performed.