When buying accident insurance, many people are confused by the term "progression". It influences the amount of your accident insurance payout in the event of a claim: if you suffer particularly severe permanent damage to your health as a result of an accident, you will receive a higher payout (compared to tariffs without progression).
This means that the progression takes into account that a greater impairment of your physical or mental ability entails extremely high costs.
Base sum: Defining the base sum is part of the buying process. It corresponds to the maximum possible payout in the event of a claim, if no progression or additional benefits have been specified. However, these benefits apply in the vast majority of cases, in which the base sum still serves as a calculation aid for the payout – as described in the example below.
Degree of disability: The degree of disability indicates the extent to which physical or mental abilities are permanently impaired as a result of an accident. It amounts to a maximum of 100%. Click here for the glossary article.
Schedule of compensation: The schedule of compensation is the basis for calculating the degree of disability. It indicates the level of disability to which the complete loss of the capacity of a particular body part or sensory organ corresponds. For example, the amputation of an arm corresponds to a degree of disability of 75%. Click here for the glossary article.
Your accident insurance will pay if you are permanently physically or mentally impaired as a result of an accident. Without additional benefits such as progression, the payout increases linearly with the degree of disability. In concrete terms, this means that 50% disability corresponds to a payout of 50% of the base sum.
Progression, however, adds a factor of increase to this equation. How exactly this is calculated is quite complex. That's why you will find a table in your insurance contract that shows you exactly what amount you will receive for each degree of disability.
The difference that progression makes is most obvious if you assume a base sum of €100,000. Without progression you will receive the following amounts:
With a degree of disability of 25%: €25,000
With a degree of disability of 50%: €50,000
With a degree of disability of 75%: €75,000
If you choose the 225 progression, this basically means: with a degree of disability of 100%, you will receive 225% of the base sum as a payout. Using the example of a base sum of €100,000 this means:
With a degree of disability of 25%, there is no progression yet: €25,000
With a degree of disability of 50%, the progression is 75%, which corresponds to a payout of: €75,000
With a degree of disability of 75%, the progression is 150%, which corresponds to a payout of: €150,000
With a degree of disability of 100%, the progression is 225%, which corresponds to a payout of: €225,000
The higher the progression, the higher the payout in case of a high degree of disability. Let's go back to our example with a base sum of €100,000. In the worst case, with a degree of disability of 100%, the differences become very clear:
225 progression: If the degree of disability is 100%, the progression is 225%, which corresponds to a payout of: €225,000
350 progression: If the degree of disability is 100%, the progression is 350%, which corresponds to a payout of: €350,000
500 progression: If the degree of disability is 100%, the progression is 500%, which corresponds to a payout of: €500,000
With a progression you can set your sum insured a little lower and still receive a high payout in case of a high degree of disability. In other words: your monthly premium is low, but you will receive a high payout in the event of particularly serious consequences of an accident. The progression thus takes into account that a higher degree of disability is associated with much higher consequential costs.
Accident insurance cushions the financial consequences that disability entails as a result of an accident. The reality is, that when an accident insurance company pays, the insured person has often been through a lot and the payment serves to ease the circumstances. We hope that you will never be confronted with such a situation.
For a better understanding, we will show you an example of how a payout is calculated in case of a claim.
Imagine that you have decided to go cycling to catch some rays of sunlight. On a road with poor visibility, you collide with another cyclist and fall off your bike. Thanks to your helmet and low speed, you have been able to avoid worse injuries, but you soon notice that something is wrong with your foot. At the hospital it turns out that your foot has suffered serious injuries.
Six months later it is clear that the injuries will not heal completely and that the foot is permanently damaged. The attending physician diagnoses the permanence of this injury (disability). He finds that your foot is limited in its ability to function by about 75%. You immediately pass all this on to your accident insurance company.
1. Since you have bought the Premium extension at Getsafe, the schedule of compensation for one foot is 40%.
2. The impairment is 75%.
3. The degree of disability is calculated: schedule of compensation × degree of impairment = 40% × 75% = 30%.
4. Your base sum is €150,000.
5. Your progression is 350.
6. If the degree of disability is 30%, the benefit due to progression is 40% of the base sum (without progression it would be 30%). This info can be found on a table in your insurance contract.
With a base sum of €150,000, the payout is therefore:
150,000 × 40% = €60,000
(base sum × progression of the degree of invalidity determined = payout)