Trust-based insurance for the self-employed
As a self-employed person, sooner or later you are likely to think about insuring yourself against chronic illness or inability to work. Self-employed people have no rights to the income support payments set out in Dutch law for employees who are unable to work. The disadvantage of conventional disability insurance (arbeidsongeschiktheidsverzekering) is that you pay money to a large institution, which decides what happens to the money. The insurance company invests the money in order to obtain high returns, making investments in businesses and developments that you know little or nothing about and probably do not support. Also, the insurance company decides when someone is eligible for benefits and how much the premiums are. This depends on the estimated risk that someone might become ill, which in turn depends on profession, age, and medical history. In addition, the premiums are often very high.
Because of this, Biba and others developed the Broodfonds (“Bread Fund”). This is a ”gift circle” (schenkkring) making provisions for inability to work. The participants themselves (self-employed people that have been trading their business for more than a year) are responsible for running the Bread fund group and bear the risks collectively. The advantage of this type of self-insurance is that you keep control over your own money. The money that you save up remains yours and you can influence how it is used. The most important aim is not to obtain more money, but to solve an income-related problem using an approach based on solidarity. One of the principles for the Bread fund is that participants know each other, so that there is no need to check up on people to ensure that they really are ill. This reduces costs. Because of this, the maximum number of participants in a Bread fund group is limited to a maximum of 50 participants.
About Biba Schoenmaker
