Best Life Insurance in Germany [Guide 2024] - Navigate Germany

Germany is a nation of insurance companies. Some are compulsory, while others are optional such as life insurance, unlike auto insurance and health insurance. Have one to protect your loved ones and to make them financially stronger even if you die.

Life Insurance in Germany

Life insurance (Risikolebensversicherung) in Germany protects your loved ones from the monetary fiasco if you die. Your extra security will pay an amount of cash to the recipient (spouse or children) you chose which means your estate will compensate for your death-related income loss or to pay off any mortgages or outstanding loans.

Working Methodology of Life Insurance

Pay the life insurance premium regularly so your heirs can get a predetermined sum of money after your death. Choose your beneficiary and contract duration carefully when you sign your life insurance policy.

Term Life Insurance

If your death occurs during the contract period, term life insurance safeguards your heirs financially by distributing the predetermined sum of money agreed in the contract. If you are alive, you will not be reimbursed for any money at the end of the contract. 

When Term Life Insurance Is Advisable?

Family Creation

Consider the financial consequences of a death if you have dependents and an increased financial obligations. Answer the questions like;

• Do you both have jobs?
• Do you have only one source of income?
• What is the impact of eliminating one spouse’s income?
• Is the income of the other spouse enough to support the family?

Acquiring Property

A loan is obtained to purchase a property as it is rarely done in cash. Returning the loan amount is a financial obligation and contingent on the family’s primary income. If you have term life insurance, it will protect your property from being abandoned by guaranteeing the loan’s repayment.

Benefits of Term Life Insurance

Check the contract terms and conditions carefully and see what benefits your chosen plan is offering.

Subsequent Insurance Guarantee

Term life insurance is good when your health is good. The amount insured is low if you are starting your life and have no children. You can increase the insured sum after certain life events (once or multiple times). You can increase it with a subsequent insurance guarantee and no medical examination is required, but this entirely depends on the provider and the chosen plan.

Policy Dynamics

There is an annual increase in the sum insured which keeps it in the purchasing power and compensates for inflation. This is the huge benefit of term life insurance.

Renewal and Cancellation

You can extend the contract term and renew the plan to compensate for the life changes and to cover for a longer period. You can cancel your insurance plan when it is no longer needed.

Early Death

If you are seriously ill, you can get a portion of the sum insured to spend on extreme care or in case your children require money to spend on your treatment.

Whole Life Insurance (Kapitallebensversicherung)

This kind of life insurance offers greater financial protection to your heirs during contract term in case of death. To get this benefit, you must pay regular premiums to save money for a long time (decades). A portion of the money will be used to cover your lifelong death benefit while the other portion will be invested in bonds and you will get a certain percentage of the return and savings from your insurance provider. If you die before estimated time, your  beneficiary will get it.

Equity-Linked Life Insurance (Fondsgebundene Lebensversicherungen)

Equity-linked life insurance provides both death protection and savings. In this life insurance, your insurance providers do not offer a guaranteed return that increases the risk. You will get back your investment amount and returns at the end of the term. If you pass away, the money will go to your beneficiary.

Indexed Life Insurance (indexgebundene Lebensversicherung)

Your insurance provider invests a portion of your premium into the stock market (German stock list, DAX) and you get a gain or loss. These kinds of contracts are very complicated because of the expected losses, required high administration, and sales costs.

Protect Yourself!

Get a term life insurance for two reasons:

• Required by your lender for loan disbursement if;
• The loan amount is relatively high
• You are the sole breadwinner
• All the property’s purchase price is financed.
• Ensure the safety of your dependents by leaving property to your family without incurring debt and to deal with additional financial concerns or even having to move.

Cost of Life Insurance in Germany

The cost of life insurance depends on how long you expect to live. If you are young and healthy, it will cost you a little.

Required Amount of Insurance in Germany

Decide your needed amount of insurance through these ways:

1. Sell your home without any debt and match the insurance amount with the mortgage debt size. It decreases when you pay it regularly.
2. Specify the minimum amount of free money your or children must have. Calculate the needed amount by adding up the anticipated income shortfall.
3. Insure from five to fifteen times your annual after-tax income and decrease to zero when your dependents start earning.

Additional Features

Term life insurers offer a lot of  additional features such as:

• Full payment if you are seriously ill and life expectancy is less than one year.
• Extension of the duration without a new health check.
• Guarantee for additional coverage.
• Increase in the policy’s value when life circumstances change
• You do not have to pay bills due to occupational disability. 

Types of Tariffs

There are three types of tariffs to have term life insurance: 1. Same amount of insurance.
2. Linearly increase in value.
3. Decrease due to annuity.

It is very easy to track the monthly premium due to the constant cost of insurance. Loan is always secured. Do not protect your mortgage via a linearly decreasing insured sum and have an open mortgage balance and a potential insurer payout.

Drawbacks

In most cases, the contract is expensive and the return is very low. Companies are mostly unable to pay the guaranteed return because of the zero interest rate in the market due to which people tend to terminate their contracts to avoid further losses.

Falling Or Constant Sum Insured

The amount of the insured sum is constant throughout the period. Whatever you chose at the beginning, will be fixed irrespective of the occurrence of the death on the first or last day of the term. This is a great way to secure your family or to have a property. Risk decreases when loan payments are regularly made or money is saved through property purchases then you can choose to have a lower insured amount.

Best Insurance Companies

Here are some insurance companies in Germany; - Getsafe is a good insurance company that has its app. They offer English customer support and coverage up to 50 million Euros.

• Adam Riese does not have a mobile app and does not offer English support, but it is cheaper than Getsafe. Their coverage is up to 7.5 million Euros.

• Helden starts at 5.50 Euros. They do not have an app or English services for their clients. Their coverage is up to 50 million Euros.

• Feather starts at 4.99 Euros and provides an app and English customer support. Their coverage is up to 30 million Euros.

Final Words

Having life insurance is the best way to protect your heirs so choose your life insurance policy according to your needs and budget. Choose a provider that offers the best services, especially support in English. Do not forget to check the cancellation terms, coverage, and costs when choosing an insurance plan.