Disability insurance: what you need to know

As an entrepreneur, you will lose income if you are (temporarily) unable to work due to illness or an accident. If you want to prevent this, you can take out disability insurance. Should you become ill and can no longer work as a result, the insurance will pay out.

What is an AOV?

Disability insurance is insurance for entrepreneurs who have no income or a reduced income due to illness or an accident. In those situations, you will receive a monthly pay out. Taking out disability insurance (Arbeidsongeschiktheidsverzekering, AOV) is currently not mandatory. From 2027, that is going to change. Entrepreneurs will then be obliged to take out insurance against incapacity for work.

Alternatives to AOV

In addition to disability insurance, you can also opt for a donation circle, crowdsurance (in Dutch) or voluntary AOV via Employee Insurance agency UWV. Which form suits you depends on your personal situation and wishes. Read more about the differences and similarities between the various options.

Benefits of an AOV

• You will receive a monthly payout in case of incapacity for work until an end date of your choice. For example, until your retirement.
• You will receive guidance from a reintegration coach so that you can return to work as soon as possible.
• You can deduct the premium through your income tax return.

Disadvantages of an AOV

• You do not accrue an income or pension. If you never use the insurance, you lose the premium you pay.
• Medical advisers and employment experts from the insurer determine whether or not you are incapacitated and whether you will receive any payout.
• You have to fill in a health declaration. If you have had health issues in the past, it is often difficult to get an AOV. Or you pay a higher premium, or get insurance with one or more restrictions.

Conditions

With most insurance policies, you are eligible for an AOV benefit if you are at least 25% disabled. This is called the execution threshold. You can also opt for a higher threshold. For example, if you choose a 50% threshold, your premium will be lower. But then you will only receive a benefit if you are at least 50% unfit for work.

Suitable employment or occupational disability

When taking out the AOV, you decide whether you opt for occupational disability or suitable employment.

Suitable employment

The insurer will see if you can possibly do other work. You pay a lower premium, but you also have to accept other work that suits your education and work experience.

Occupational disability

The insurer looks at whether you can still do your own job within your own business. If not, you do not have to accept substitute work. You will pay a higher premium.

Premium

When calculating your premium, the insurer also looks at:

• the physical strain of your profession;
• your age;
• the chosen execution threshold;
• your lifestyle and health (health declaration);
• the payout period of your insurance;
• the final age you want to insure, for example until age 65.
• what amount you want to insure (maximum 80% of your income);
• the excess, or ‘own risk’ period.

You get sick

If you fall ill, you will receive guidance from the insurer to help you get back to work as soon as possible. If this does not work out, the insurer will see if you qualify for benefits. Medical advisers and labour experts from the insurer will determine the percentage of your disability.

Take out AOV

Want to take out an AOV? You can do so with insurers, banks, independent advisers and sector organisations. Always request multiple price quotations so you can compare conditions and premiums.