What does indexation (Dynamik) do in German disability insurance?

Guide figures from published German sample calculations, as of October 2026.

Premium indexation works while you are healthy and paying. Every year premium and insured benefit rise by an agreed rate. The point is that you answer no new health questions, even if you have since been diagnosed with something that would block a new policy.

Benefit indexation only starts once you are disabled. You no longer pay premiums, yet the benefit still rises each year. If you become disabled at 35, you may draw the benefit for more than 30 years. Without benefit indexation it stays at the same euro amount the whole time.

At 2 percent inflation, EUR 1,500 a month buys after 20 years what about EUR 1,010 buys today. To keep its value the benefit would have to grow to about EUR 2,230.

Your pay also grows over a career. A benefit that matched your salary at 25 is often far too small at 45. Premium indexation pulls the benefit along without a new health check, which is especially useful if you arrived in Germany early in your career.

Each increase is priced like a small new policy, using your higher age at that time and new acquisition costs. So the benefit often grows more slowly than the premium. A 5 percent premium increase may only raise the benefit by about 3.8 percent, for example.

Most contracts let you decline an increase, often twice in a row. Decline more often and some tariffs cancel the right to future increases altogether. Indexation also usually stops at a set age, often between 55 and 60. Increase letters arrive in German; put a reminder in your calendar so a deadline does not pass unnoticed.

As a guide figure, guaranteed benefit indexation of 2 percent costs about 14 percent extra premium, 1 percent about 7 percent. You pay this every year, even if you never claim.

Whether it pays off depends on how long you could draw the benefit. At 30 with cover to 67, that is up to 37 years. At 55, there is little time left for the increases to work. Make sure the indexation is guaranteed, not paid only from surpluses (Überschüsse) that the insurer can cut.

If your policy has only a few years left, benefit indexation adds little. If your benefit is already close to the insurer's maximum relative to income, premium indexation may not raise it any further.

On a tight budget, a high enough base benefit without indexation beats a small benefit with it. Choose benefit indexation first. An increase option (Nachversicherungsgarantie), which lets you raise the benefit on events such as marriage or a pay rise without new health questions, can partly replace premium indexation.