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Loss of ability to work
Insurance on the loss of ability to work secures your finances if you are affected by a serious illness or accident and unable to work. Insurance provides you the possibility of receiving payments if your ability to work is reduced.
You can adjust the insurance to fit yourself and your life. Your payout and how you receive it is therefore individually determined.
Insurance upon loss of ability to work may consist of one or more elements:
- A monthly contribution that typically amounts to a percentage of your salary.
- A one-time payment (disability lump sum)
- Exemption from contributions. This means that the pension provider takes over contributions to your pension scheme. You keep your insurance, and your pension savings continue even if you yourself are no longer making contributions.
The monthly contribution is initially supplementary to any public benefit, and if your insurance coverage is sufficient, you will therefore in most cases be ensured a payout that is largely equivalent to the your salary level from before your lost your ability to work.
Note there may be different criteria that need to be met before a payout can be made, depending on what pension provider you are insured by. There is also a major difference as to whether you are insured by a commercial company or a pension fund, and this can at the same time depend on public benefits awarded in the event of reduced ability to work.
Lump-sum disability payment
A disability lump sum is an insurance one time pay out if your ability to work is reduced by 2/3, and this reduction is considered permanent. The payout is non-taxable.
You must be aware of the fact that the term “permanent” varies depending on whether one is insured through a commercial provider or a pension fund, and at the same time may depend on the awarding of public funds upon reduced ability to work.
”At Ensure we received the best service and advising you can get for the money”
– Hanne Hansen, Ensure Pension client
Life insurance
Insurance in the event of death helps your next of kin maintain financial solvency in the event of your death prior to reaching retirement age.
You have the possibility of adapting the insurance so it fits the needs of survivors.
You can choose whether the payout is to be made as a lump sum or an annuity.
- If you choose the payout to be as a lump sum, the premium is non-deductible, so the payout is non-taxable.
- If you choose an annuity, the premium will be deductible. The payouts are thereby taxed as personal income. Payouts can be converted to a lump sum against payment of a 40% fee.
Who receives the insurance payouts?
As a general rule the payout will be made to the “next of kin.’ You can also choose to have the money go to someone else.
If the insurance was established after 1 January 2008, next of kin covers these individuals in order of priority:
- Spouse/domestic partner.
- Domestic partner (if you share a primary residence and have done so for at least two years, or have had/are expecting children together)
- Children, grandchildren and great-grandchildren (not step children).
- Inheritance per last will and testament.
- Inheritance per the Inheritance Act.
If your insurance was established prior to 1 January 2008 and you have not changed the beneficiary clause, your domestic partner is not covered under “next of kin.”
If you want the payout to go to someone other than your ‘next of kin’ in the above sequence, you can appoint a specific person. Whom you can choose depends on whether your insurance includes right of deduction.
You must be aware that your survivors will have to pay an inheritance tax, depending on whom it was left to.
Children’s pension/annuity
With an children’s pension you can ensure your child a monthly payment from the time of your death (prior to retirement age) until they turn 24.
You can set up a children’s pension for your own children and stepchildren.
The amount becomes payable if you should pass away before you reach an agreed age/insurance expiration date. This is taxed as personal income for the child. If the child is under 18 years of age, the insurance is paid out to the child’s guardian and taxed as personal income tax for the child.
Critical illness
Insurance for critical illness is a type of insurance that gives you the option of receiving a lump-sum payment if you are affected by any one of a number of serious conditions.
Conditions covered vary from one provider to another. There may be various requirements for the diagnosis of a given critical disease. These conditions must be mentioned in the insurance conditions, and if it is not named, it is not covered.
If you are affected by a condition listed in your insurance conditions, and if the specific requirements for the diagnosis are met, you receive a non-taxable cash payment when the diagnosis is made.
In some pension providers it is also possible to have critical illness in children added in.
Want to know more?
If you would like to find out more about how Ensure can help you find the best solution on the pension market, please contact Managing Partner Lasse Siggaard by telephone +45 3131 3195 or email lsi@ensure.dk.
Your meeting or conversation with us is completely free of charge and non-binding.
Health insurance
Health insurance is your shortcut to a fast evaluation, testing and treatment, and ensures that you can recover quickly and get back to work. The insurance serves as a supplement to the public hospital system.
Health insurance covers, including:
- Medical treatment
- Psychological treatment
- Alternative treatment
- Treatment at a private hospital or clinic
- Check-ups and treatment follow-up
- Rehabilitation after surgery
- Second opinion
- Treatment for abuse
Health insurance can be obtained both privately and through an employer. If the insurance is paid by your employer, the portion related to non-working time bears tax obligation for you.
There can be a major difference in what coverage is offered by various medical insurance providers, so worth reviewing this in the terms and conditions of your insurance cover.
Dental insurance
Dental insurance provides financial stability, healthy teeth, better quality of life, and fewer sick days, and you can visit your dentist without worry. If your dental insurance is paid for by your employer, your are taxed on the premium.
Group casualty
Group casualty insurance is often established through your employer or a trade organisation.
If your group accident insurance is paid by your employer, and only covers insurance during your working hours, you are not taxed on the premium. But if the coverage also applies to insurance events that take place during your non-working hours, then you are taxed on the premium.
