Which progression should you choose for accident insurance?

Published premium figures for Germany and payouts calculated from the published progression scale, sum insured EUR 100,000.

Many people read 500 percent progression and assume every payout is multiplied by five. It is not. The percentage refers to your sum insured (Grundsumme) and only describes the maximum paid at full impairment. At small degrees of impairment nothing happens: in standard German wordings the extra benefit starts at 26 percent, and below that the payout is simply degree times sum insured.

The logic behind it is sound. A light lasting injury barely changes your life; a severe one makes your money needs jump: a step free flat, an adapted car, care, retraining, often a permanently lower income. That is where the money should go, and that is why the payout rises disproportionately there.

The goal is not a progression figure, it is the amount that arrives at full impairment. EUR 500,000 was long treated as the floor. Because adapting a home, aids and care have become more expensive, current consumer tests now require EUR 750,000 before a tariff is even rated. For the sum insured itself the usual guide is four to six times your gross annual income, six times at age 30 and four times at age 50, but at least EUR 100,000.

The same target can be reached in many ways, and they are not equally good. At roughly the same premium, a high sum insured with a middling progression pays more in the common cases than a small sum insured with a steep progression. The reason is simple: the sum insured works at every degree, progression only at the top.

1000 percent on a sum insured of EUR 50,000 looks impressive in an offer and almost never helps. At 10 percent impairment it pays EUR 5,000, at 50 percent EUR 75,000. The million only appears at complete impairment, which is the rarest case of all. The common outcomes are fractures that leave something behind, a stiff joint, a finger, an eye. There only the sum insured counts.

It is worth doing the sum the other way round too. Moving from 225 to 500 percent costs a noticeable share of premium. The same money put into a higher sum insured, or into an improved Gliedertaxe, works across more cases. And if your sum insured is already high enough to reach the target without a progression scale, you do not need progression at all.

It changes nothing about the Gliedertaxe. If the percentage for the hand is low, the degree of impairment stays low, and a steep scale does not engage at all because the 26 percent threshold is never reached. Table and progression have to be checked together, never one without the other.

And it does not replace an income. It pays once. If an accident leaves you permanently earning less, you need an accident pension (Unfallrente) or, better, occupational disability insurance, which also pays when illness is the cause. Most people who have to give up their job do so because of illness, not because of an accident.