Life Insurance in Germany: Types, Benefits and What Migrants Need to Know
What Is Life Insurance in Germany?
Life insurance (Lebensversicherung) in Germany is a contract in which the insurer pays an agreed sum upon the policyholder's death or, depending on the product type, at the end of the contract term. The two main purposes are financial protection for dependants after the death of a breadwinner, and long-term savings for retirement.
Germany has three main product categories: the Risikolebensversicherung (term life insurance, pure death cover), the Kapitallebensversicherung (whole-of-life or endowment insurance combining death cover with savings), and the fondsgebundene Lebensversicherung (unit-linked life insurance, where the savings portion is invested in funds).
The Main Types Explained
Risikolebensversicherung (Term Life Insurance)
The simplest and usually most affordable type. It pays a lump sum to named beneficiaries if the insured person dies within the contract period. If the insured person outlives the contract, no payment is made and coverage ends. This type is most suitable for protecting dependants — a partner, children, or co-borrowers on a mortgage.
Kapitallebensversicherung (Endowment Insurance)
A combination of death cover and a savings plan. Part of each premium goes toward risk protection; the rest is saved and grows at a guaranteed rate. The policy pays out either on death or at the end of the agreed term — whichever comes first. The guaranteed interest rate (Garantiezins) is set by regulation and has fallen significantly in recent decades, currently standing at 0.25%.
Fondsgebundene Lebensversicherung (Unit-Linked Insurance)
The savings portion is invested in investment funds, offering potentially higher returns but also market risk — the final payout is not guaranteed. Some policies include partial capital guarantees. This type suits people comfortable with investment risk who also want the tax advantages of an insurance wrapper.
What Is NOT Covered?
- Suicide in the first years: Most policies exclude or limit payouts for suicide within the first two or three years of the contract.
- Undisclosed pre-existing conditions: If you answer health questions inaccurately or incompletely at application, the insurer may void the contract and refuse to pay. Honesty during the application process is critical.
- War and nuclear events: Standard exclusions in almost all life insurance contracts.
Key Considerations for Expats and Migrants
Can Non-German Citizens Apply?
Generally yes. German life insurers can cover residents of Germany regardless of nationality. You will typically need a valid residence permit and a stable address in Germany. Short-term or uncertain residence status may limit your options with some insurers.
What If You Move Abroad?
Many contracts can be continued if you relocate abroad, but conditions may change. You must notify your insurer of any planned move — failing to do so may affect coverage. For moves to countries considered high-risk, insurers may impose restrictions.
Beneficiaries Living Outside Germany
You can name beneficiaries who live abroad. The insurer will pay the agreed sum to them regardless of their location. However, tax implications in the beneficiary's home country should be checked independently.
Health Questions at Application
Insurers always ask detailed health questions before issuing life insurance. Incorrect or incomplete answers — even unintentional — can result in the insurer voiding the contract exactly when the payout is needed most. If you are unsure about a question, seek advice before signing.
Key Terms
- Versicherungssumme (sum insured): The amount paid on death or at policy maturity.
- Bezugsrecht (beneficiary right): The right to receive the insurance payout. The named beneficiary receives the money directly, outside the deceased's estate.
- Rückkaufswert (surrender value): The amount you receive if you cancel the policy early. In the early years this is typically well below total premiums paid.
- Garantiezins (guaranteed interest rate): The minimum interest rate the insurer must credit to the savings portion. Currently 0.25%.
Editorial note: This article is for general informational purposes only and does not constitute insurance or financial advice. eev24.de is an independent information portal and not a licensed insurance intermediary under §34d GewO. For personal recommendations, consult a licensed insurance broker (Versicherungsmakler) or financial adviser.