A financial freedom plan can collapse within months because of a single event: a long illness, an accident, a death, a disaster. Before optimising your investments, check that what matters most, your ability to earn money, is protected.
What Belgian social security already covers
If you are an employee
- Your employer first pays your guaranteed salary, generally for the first month of incapacity.
- Then your health insurance fund (mutualité / ziekenfonds) pays 60% of your capped gross salary during the first year.
- From the second year (invalidity), the benefit depends on your family situation: about 65% with a dependant, 55% for a single person, 40% for someone living with a partner who has an income.
Because the salary taken into account is capped, the real loss is greater for middle and high earners.
If you are self-employed
There is no guaranteed salary. The health insurance fund pays a flat-rate benefit after a period without compensation, often well below normal income. For a self-employed person, inability to work is the number one financial risk.
- Month 1Guaranteed salary from the employer (employees)
- Up to 1 yearHealth fund: 60% of capped gross salary
- After 1 yearInvalidity: 40 to 65% depending on family situation
- The top-upIncome protection insurance, especially for the self-employed
The insurance that really protects a plan
Income protection insurance
It tops up the health fund's benefits in case of illness or accident, up to a percentage of your income. Points to compare:
- the waiting period (the uncovered period at the start);
- the duration of cover, ideally up to retirement age;
- the definition of incapacity: in relation to your occupation or to any occupation;
- the exclusions, particularly for back problems and mental health.
For a self-employed person, premiums can often be deducted as a business expense: check with your accountant.
Mortgage life insurance
It pays off your mortgage if you die. It is not required by law in Belgium, but banks almost always demand it. For a property investor, it also protects the family from a debt that would become unmanageable.
Personal liability insurance
Inexpensive, it covers damage you cause to others in your private life. An accident caused by your children or your dog can be very expensive without it.
For landlords
- Fire insurance suited to the rented property, with a waiver of recourse if needed.
- Possibly rent default insurance.
Insurance that is often useless
- Extended warranties on appliances or phones.
- Duplicates: travel assistance already included with a bank card, legal protection twice over.
- Expensive ‘savings insurance’ products whose fees you do not understand.
The three-question method
- What happens if I cannot work for a year? Put figures on your income and expenses in that scenario.
- What happens to my family if I die? Loans, missing income, children.
- Which disaster could cost me more than my emergency fund? That is the one to insure.
The principle: insure what would be a financial catastrophe, and keep in your emergency fund what you can absorb yourself.
Where to find these services
- Belgian social securityYour rights in case of incapacity for work
- Wikifin (FSMA)Understanding and comparing insurance (French and Dutch)
Links provided for information, with no partnership. Always check a provider's terms and authorisation before committing.
Test yourself
3 questions to check what you remember. Click an answer: the explanation appears straight away.
Question 1 of 3How much does the health fund pay a Belgian employee in the first year of incapacity, after the guaranteed salary?
Because the salary is capped, the real loss is greater for middle and high earners.
Question 2 of 3What is the number one financial risk for a self-employed person?
The health fund's benefit is flat-rate and limited: income protection insurance is often essential.
Question 3 of 3Which principle guides your choice of insurance?
Extended warranties and duplicates often cost more than they protect.
Frequently asked questions
What does a Belgian employee receive during a long-term illness?
First the guaranteed salary from the employer, then 60% of capped gross salary paid by the health fund in the first year. After that, in invalidity, 40 to 65% depending on family situation.
Does a self-employed person need income protection insurance?
It is often the most important insurance for a self-employed person: there is no guaranteed salary and the health fund's benefit is flat-rate and limited.
Is mortgage life insurance compulsory?
Not by law in Belgium, but banks almost always require it to grant a mortgage.
Sources
This article is educational and is not personal investment, tax or legal advice. Figures change: check them with the sources cited or a licensed professional before deciding. Read the full disclaimer.