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| Life Insurance Germany (Risikolebensversicherung) |
In Germany, life insurance is also known as risk life insurance, which is written as Risikolebensversicherung (RLV). It is one of several types of insurance in Germany, which includes health insurance for migrants or residents, legal insurance, liability insurance, or home insurance. The benefit of life insurance coverage is that in the event of death, dependents will not need to struggle with financial difficulties that were previously covered by your income.
Below are the sections where you can find everything you need to know about life insurance:
What is German Life Insurance?
A life insurance policy in Germany ensures that in the event of the insured person's death, the insurance company will pay a certain amount to the deceased's dependents (pre-selected beneficiaries). Whether your dependents, such as children, need your financial income for their education, or you have a loan that needs to be repaid, a life insurance policy in Germany assures that the financial loss due to death will be compensated.
Who Needs Life Insurance in Germany?
If you have people who are financially dependent on you, such as children, a spouse, or parents, you can consider purchasing a life insurance policy. On the other hand, if no one depends on your income, you might not need life insurance in Germany. Many adults start thinking about life insurance after becoming parents because they immediately find someone who will be directly dependent on their income. Exceptions can occur when the family can comfortably live on savings or the income of the other spouse/partner.
If you fall into any of the following categories, you need life insurance:
- Parents with young children. Coverage helps with household expenses, bills, daycare, entertainment expenses, tuition, and college care. If your children are older, you may only need coverage until they enter the workforce.
- Main breadwinners in the family. Life insurance provides financial security for those dependents who are not in the workforce and cannot handle their monthly expenses themselves.
- Business owners. In this case, life insurance provides sufficient financial compensation to keep the business running.
- Elderly adults without savings. In this example, if you have no personal savings, you will need a life insurance policy that covers the cost of final expenses.
According to financial experts, not everyone needs life insurance. Life insurance is a valuable type of insurance, especially for those who financially support anyone, regardless of who they are. Even if you already have life insurance, you can only purchase it for the time when you spend your income supporting your family.
How Does Life Insurance Work in Germany?
If a person with a life insurance policy dies, the life insurance company will pay beneficiaries (those named in the contract signed by the insured person) a specific amount. With this amount, families will be able to support dependents, maintain their expenses, and repay the insured person's loan if needed. Besides assisting dependents, life insurance also helps when immediate cash or final expense costs arise.
How to Obtain Life Insurance in Germany?
Before taking out life insurance, you should calculate your family's financial needs in the event of your death. You need to consider what the cost will be in the worst-case scenario, such as funeral expenses, taxes, medical bills, etc. You should also consider long-term expenses such as college tuition, loan repayment, or retirement savings.
To purchase life insurance, you can do so online, by phone, or in person (by visiting the company's branch). You will be asked for a specific set of documents, personal identification, bank details, and questions related to your circumstances (spouse/partner, children, loans, obligations, health, hobbies, etc.).
How to Purchase Life Insurance Online in Germany:
- Choose a life insurance company: Germany has a wide range of life insurance providers from which you can purchase your insurance. It depends on what suits your needs and finances.
- Answer a series of questions: After choosing your life insurance provider, visit their website and answer a series of questions that will determine what type of life insurance you need. Questions may be related to your health, whether you smoke, the health of your family, your job, whether there are hazardous activities, your lifestyle, etc.
- Decide on the insurance amount: You need to determine how much money your dependents will need in the event of your death. This includes the cost of final expenses, loans, future expenses, etc.
- Specify the duration of the contract: This is entirely personal and depends on the age of your dependents (if you have children), whether they will need money for college, or if you have any debts (amount of the loan), etc.
Calculate the premium. You will need to pay a monthly premium until your life insurance contract expires. Generally, you should consider keeping your insurance until your children reach working age or until you have repaid any debt. Essentially, you should consider keeping the insurance until your dependents need financial compensation in the event of your death.
The premium for your life insurance policy will not be the same as the next person's because its calculation depends on your needs and circumstances.
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| life insurance premium |
Your life insurance premium will depend on the following factors:
- Type of policy (joint/single name).
- Required coverage amount.
- Length of the policy.
- Your health/lifestyle.
Popular life insurance types in Germany
There are many life insurance companies in Germany that may tailor your policy according to your priorities. You are always advised to purchase for the optimal option, providing the right coverage and cost for your needs. According to Statista, Allianz Leben and R+V Lebensversicherung AG were the leading life insurance companies in Germany in terms of total written premiums in 2016.
List of popular life insurance companies in Germany:
Allianz Leben: There are many benefits to Allianz life insurance in Germany, from retirement provisions to classic life insurance. Based in Stuttgart, Allianz has garnered over ten million customers throughout Germany, benefiting from its life insurance policies.
R+V Lebensversicherung AG: Serving customers in Germany and operating as an insurance company, R+V Lebensversicherung AG also provides services in retirement, family, electronic, vacation, health, car, liability, and home insurance alongside life insurance policies.
Generali Leben AG: With nearly 10 million customers, this life insurance company is one of the largest insurance groups in the German market. Successful with its innovative and personalized solutions and services, it has become a favorite among customers.