Compare Life Insurance in Germany

How life insurance works in Germany

Life insurance in Germany comes in two flavors. One pays out only if you die. The other tries to be both insurance and a savings account. Knowing the difference saves you from overpaying.

Term life insurance (German: Risikolebensversicherung) pays a lump sum to your beneficiaries if you die during the policy term. No savings, no cash value, no investment returns. It is cheap and does one job well. Most financial advisors in Germany recommend this type for families. See our dedicated term life insurance comparison for expats for a detailed breakdown of costs, tax benefits, and how to apply as a foreigner.

Endowment life insurance (German: Kapitallebensversicherung) combines a death benefit with a savings plan. Higher premiums, and at the end of the term you get a payout even if you are still alive. Returns have been disappointing for years though. The consumer advocacy organization Verbraucherzentrale generally suggests keeping insurance and investing as separate things.

Unit-linked life insurance (German: fondsgebundene Lebensversicherung) works like endowment insurance, except your money goes into investment funds. Higher potential returns, but also higher risk. Your payout depends on how the funds perform.

For most people who just want to protect their family financially, term life insurance is the straightforward choice. You pay less, you get clear protection, and you invest your savings elsewhere. If you also want to protect your income while you are alive, consider disability insurance (BU), which pays a monthly benefit if illness or injury keeps you from working.

Pension planning is a separate topic with its own rules. Our pension insurance for expats guide covers Riester, Rürup, and private pensions for foreigners in Germany.

Which providers offer life insurance in Germany?

The German life insurance market has dozens of providers. When you use the comparison tool above, you see personalized quotes from multiple insurers. The widget pulls offers from the pool of partner insurers in the Tarifcheck network.

Some of the well known names in the German term life insurance market include larger insurers like Allianz and AXA, cost focused online providers like CosmosDirekt and Hannoversche, and newer digital first companies. Each has different strengths: some offer lower premiums for healthy applicants, others are more flexible with pre-existing conditions or foreign applicants.

The point of comparing is exactly this: prices for the same coverage can vary by 50% or more between providers. A 35 year old non-smoker might pay 12 EUR per month with one insurer and 22 EUR with another for the same 200,000 EUR coverage. The comparison tool shows you these differences side by side.

Life insurance and mortgages in Germany

If you are buying property in Germany, your mortgage lender will almost certainly ask about life insurance. Many banks make term life insurance a condition for loan approval, especially for larger mortgage amounts.

The logic is simple: if something happens to you, the insurance pays off the remaining mortgage. Your family keeps the home instead of facing foreclosure.

Two common approaches:

• Level term insurance: Coverage stays the same throughout the term. Costs a bit more but gives you flexibility.
• Decreasing term insurance (German: fallende Versicherungssumme): Coverage drops over time as your mortgage balance decreases. Cheaper, but only useful for mortgage protection.

If your mortgage is 300,000 EUR over 25 years, a decreasing term policy is usually cheaper. But if you also want general family protection beyond the mortgage, a level term policy for a higher amount makes more sense.

Planning to buy property? Compare loan rates in Germany or explore construction financing options.

Health questions and medical exams

Every life insurance application in Germany requires you to answer health questions (German: Gesundheitsfragen). These cover your medical history, existing conditions, and medications. Answer honestly. If the insurer later finds out you withheld information, they can refuse to pay.

For coverage up to about 200,000 to 300,000 EUR, most insurers only require the questionnaire. No physical exam. Higher amounts or complex health histories may trigger a medical examination.

One useful feature many German policies include: the guaranteed increase option (German: Nachversicherungsgarantie). This lets you raise your coverage without new health questions when major life events happen, like marriage, the birth of a child, or buying property.

Tax benefits of life insurance

Term life insurance premiums are partially tax-deductible as "Vorsorgeaufwendungen" (pension-related expenses). In practice, the tax benefit for term life insurance is small for most people because health insurance contributions usually eat most of the cap.

For endowment and unit-linked policies held at least 12 years with payout after age 62: only 50% of the investment gains are taxed. This applies to contracts signed after 2005. Older contracts from before 2005 may be completely tax-free at maturity.