Gekko’s wiki article on disability insurance (hereafter AOV) already explained the importance of taking out an AOV, particularly for business owners.
However, an AOV may not be the best option in some cases. A reason for this could be the cost, but also the requirements that are set, which makes it impossible for some people to take out an AOV. Furthermore, circumstances such as having large enough assets or a well-stocked savings account can also be a reason to not take out an AOV.
Should you be restricted by the rules of an AOV or if the cost is too high, then there are fortunately a lot of alternatives. In Gekko’s other wiki, we talk extensively about the broodfonds and the schenkkring. But besides the broodsfonds and schenkkring, there are also other alternatives to the traditional AOV.
Voluntary insurance at UWV
One of the AOV alternatives is taking out the voluntary insurance with the UWV. Voluntary insurance is especially interesting for new business owners who worked as either an employee or received benefits from the government, before starting their business.
One of the requirements for taking out a voluntary insurance with the UWV is that you register for the voluntary insurance within 13 weeks from the end of your employment, or since your last received benefit. The application period for this type of insurance is therefore considerably short.
Another reason which makes taking out a voluntary insurance with the UWV attractive is that no medical examination is needed. If you already suffer from health problems, which might make it impossible to take out a traditional AOV, a voluntary insurance with the UWV is a perfect solution.
Besides that, you have the option to cancel the voluntary insurance at any time.
Although the voluntary insurance with the UWV offers many benefits and accepts everyone in terms of health conditions, it does come with a higher cost. And you only get paid out once you get declared 35% disabled. Lastly, the maximum payout period with a voluntary insurance is 2 years.
A vangnet insurance can only be taken out within 15 months from the moment you registered your company with the chamber of commerce (kvk). If you become disabled, a vangnet insurance will have a waiting period of 1 year. Once paid out you will receive a maximum of 70% of the Dutch legal minimum wage. This amount is comparable to the one you would receive with a WIA.
Besides the maximum payout, the amount also depends on the degree of the disability. The degree of the disability is measured by the insurer by looking at possible alternative work. An example would be physically less demanding tasks such as keeping up an administration. In case of a partial disability, you will also only receive a portion of the payout instead of the full amount.
The biggest difference between a vangnet insurance and the other AOV alternatives such as a schenkkring, is that the benefit of the vangnet insurance is concluded without a maximum term. Therefore, should you become permanently disabled, you will receive the amount that is paid out until your retirement age. The paid out amount is adjusted annually based on the current situation and circumstances of your case.
Bijstand voor zelfstandigen (Bbz)
Instead of taking out insurance for possible disabilities, you might qualify for self-employment assistance (Bbz) from your municipality. To qualify for the self-employment assistance, you must meet certain requirements.
For example, your business must be viable, which is calculated based on the basis of your family situation. A viable business means that your business must generate enough income to be able to continue to exist and to support your family. Furthermore, it is also required you work at least 1,224 hours per year within your own company, which would be an average of 23.5 hours per month. Looking at this last requirement a Bbz does not apply should you endure a long-term disability. It is after all an assistance provided by a municipality and not an ongoing insurance.
Even though a Bbz can provide a short-term solution should a short-term disability occur, it is important to note that once you receive a Bbz, you are no longer entitled to get help from the bank or a security fund.
It might also be possible that your personal wealth is sufficient enough that taking out a traditional AOV or alternative insurance may not seem beneficial or relevant. However, it is important to not overestimate your accumulated wealth and to have your capital properly checked and calculated by a specialist.
Personal wealth in itself is a broad term under which several forms of assets can be categorized. For example, your assets may consist of a well-filled savings account, but also an investment in real estate such as a house can be categorized as assets counted towards your wealth.
However not only your own assets but also those of a partner or family member can be seen and used as a reserve plan should you become incapacitated. If your partner’s income is substantially high enough to cover a temporary decline in income, there might be no need to take out an insurance.
To avoid a possible miscalculation it is once again important to have your or your partner’s capital checked by a specialist.
Lastly, it is also important to perform such check ups regularly. The reason for a regular check-up is that your financial situation can always change. To keep the financial picture as accurate as possible, it is advised to do such check-ups at least once a year.