Disability insurance (AOV): premium & take out

Introduction

Do you want to start a business in the Netherlands or have you just set up your own company? Then there are a number of things you need to pay attention to. For example, there are some insurances that are compulsory and you have a range of insurances that are not, but are useful to take out. For example, what about disability insurance? Is such insurance mandatory and how do you score the most inexpensive insurance? You'll read about it in this article.

What is disability insurance?

Disability insurance (AOV) is insurance that provides income protection for people who are temporarily or permanently unable to work due to illness or an accident. This insurance ensures that the insured receives a monthly income during the period of disability, enabling him or her to meet financial obligations and basic needs.

Is an AOV mandatory?

It is not mandatory to take out an AOV when you own your own business/zpp'er. However, in many cases it is advisable to take out an AOV. Of course it depends very much on which branch you are working in. A self-employed construction worker, for example, has more risk of an accident while working than a self-employed person who writes or photographs as a profession. Of course, this does not mean that nothing can happen as a writer or photographer. That's why it's important to figure out carefully the extent to which an AOV could cover your possible workplace risks in the event. You do that by starting with AOV comparison for the best deal.

AOV premium calculation

Calculating the premium for disability insurance (AOV) depends on several factors. Insurers look at various aspects to assess the risk of disability and set the premium accordingly. To give you an idea of how your premium is calculated, we list the main factors that affect the premium:

• Age: In general, the older you are, the higher the premium, because the risk of disability increases with age.
• Occupation: Some occupations have a higher risk of disability than others. If you are in an occupation with a higher risk, the premium may be higher.
• Insured amount: The amount you want to receive as disability benefits affects the premium. The higher the insured amount, the higher the premium.
• Waiting period: The waiting period (also known as the excess period) is the period during which you do not receive benefits after becoming disabled. A longer waiting period usually results in a lower premium.
• Benefit duration: The period in which you receive benefits when you are disabled affects the premium. A longer benefit period usually results in a higher premium.
• Coverage ratio: The degree of disability at which you want to receive benefits affects the premium. A lower coverage ratio (i.e., a benefit at a lower percentage of disability) generally results in a higher premium.

Is the AOV premium deductible?

It is good to know what the deductions for entrepreneurs are regarding your AOV. In the Netherlands, the premiums for disability insurance (AOV) are deductible from your taxable income for income tax purposes. This means that you can deduct the premiums you pay for your AOV as a personal deduction in box 1 (income from work and home) of your tax return. This deduction reduces your taxable income, which means you end up paying less income tax.

Purchasing disability insurance.

Taking out an AOV is a process that consists of several steps. Here is an overview of the most important steps:

1. Orientation and research: Start by researching and comparing different insurance companies and the AOV products they offer. Compare premiums, coverage, waiting periods and other terms to find insurance that fits your financial situation and needs.
2. Request quotes: Request quotes from several insurers to get a better idea of the costs and coverage they offer. Make sure you have all the necessary information at hand, such as your occupation, income and any existing health problems.
3. Choose an insurer and coverage: After comparing quotes, choose an insurer and the coverage you want. Consider aspects such as the insured amount, the waiting period (also called excess period), the final age and the disability criterion (professional or suitable work).
4. Medical questionnaire and examination: When taking out an AOV, you usually have to fill out a medical questionnaire. Depending on your age, desired coverage and health status, the insurer may also ask for a medical examination. This helps the insurer assess the risk and determine the premium.
5. Acceptance and Policy: If your application is accepted by the insurer, you will receive a policy with the terms and conditions of the insurance. Read these carefully and make sure you understand all the terms and conditions before signing and returning the policy.
6. Premium Payment: After signing the policy, you must pay the premium according to the agreed payment period (monthly, quarterly, semi-annually or annually). Once the premium is paid, your AOV starts and you are insured against disability.

It is important to regularly reassess your situation and needs and adjust your insurance if necessary. This ensures that you are always adequately covered in case of disability.