In Germany, life insurance is also referred to as risk life insurance, written as Risikolebensversicherung (RLV). It is one among the many types of insurance in Germany, including health insurance for expats or residents, legal insurance, liability insurance, or home insurance. The advantage of a life insurance coverage is that in the event of death, dependents will not need to go through financial difficulties which were previously covered by your income.

Find everything you need to know about life insurance in the sections below:

What is German Life Insurance?

A life insurance policy in Germany will ensure that in the event of the death of the insured person, the insurance company will pay a select sum of money to the dependents (pre-selected beneficiaries) of the deceased. Whether your dependents, such as children, need your financial income for their education, or you have a loan that needs to be paid off, a life insurance policy in Germany assures that the lack of income, as a result of death, will be compensated.

Who Needs Life Insurance in Germany?

You can consider purchasing a life insurance policy if you have people who are financially dependent on you, which could be a child, spouse, or parent. On the other hand, if no one is dependent on your income, then you likely do not need life insurance in Germany. Many adults start thinking about life insurance once they become parents, because they instantly have a person who will directly rely on their income. An exception could be when the family can live comfortably on savings, or the other spouse’s income.

You need life insurance if you belong in one of the following categories:

  • Parents with young children. Coverage that helps in taking care of household expenses, bills, daycare, recreation fees, courses, college. If your children are older, you may only need coverage until they enter the labour market.
  • Main earners in the family. Life insurance, if you fall into this category, will offer financial protection for spouses who are not in the workforce and cannot handle monthly expenses on their own.
  • Business owners. In this case, life insurance provides enough financial compensation to help keep the business going.
  • Older adults without savings. In this instance, you will need a life insurance policy which is large enough to cover funeral expenses, in case you do not have personal savings.
  • Adults with (student) loans. Life insurance will help pay student loans in the event of death.

Not everyone needs life insurance, according to financial experts, life insurance is a particularly valuable type of insurance for people who support someone, whoever that could be, financially. And even if you do have life insurance, you may only purchase it for the time you spend supporting your family financially.

How Does Life Insurance in Germany Work?

If the person who has a life insurance policy dies, the life insurance company will pay a particular amount of money to the dependents (which are assigned by the insured person the moment they signed the contract). With this amount, the family will be able to support dependents, maintain their expenses, and pay the insured person’s loan. Apart from helping to support dependents, life insurance will also be of help when it comes to immediate cash or funeral expenses.

How to Get Life Insurance in Germany?

Before getting life insurance, you should decide what type of insurance you need, by calculating the financial needs of the family in case of death. You should consider what the costs will be in the worst-case scenario, such as immediate costs related to the funeral, taxes, and medical bills. You should also take into consideration long-term expenses such as college tuition, debt payments, or retirement funds.

In order to purchase life insurance, you can either do so online, by phone or in-person (by visiting the company’s branch). You will be asked to provide a specific set of documents, personal IDs, bank statements, name the insurance beneficiaries, and be asked a set of questions related to your circumstances (spouse, children, debts, mortgage, health, hobbies, etc).

Here’s how to purchase life insurance online in Germany:

  • Choose a life insurance company. There is a wide range of life insurance providers in Germany you can purchase your insurance from. It just depends on which one better suits your needs and finances.
  • Answer the series of questions. After choosing your life insurance provider, go to their website and answer the series of questions which will determine the type of life insurance you need. The questions might be regarding your health, whether you are a smoker or not, your family’s health, your job, whether it includes dangerous activity, your lifestyle, and the likes.
  • Decide on the sum insured. You should decide on how much money your dependents would need in the event of death. This takes into consideration funeral costs, debts, future costs, etc.
  • Specify the length of the contract. This is completely personal and depends on the age of your dependents (if you have children), whether they will need money for college, or/and if you have loans (the amount of the loan), etc. Usually, life insurance can last decades, 1 to 3 decades, depending on who your dependents are.

How Much Does Life Insurance in Germany Cost?

The cost of life insurance in Germany largely depends on the sum that you are insuring, the length of the contract, and your age. What also plays a part in the cost of life insurance in Germany is the death risk of the insured person at the time of the contract, which essentially means that smokers might be required to pay more than non-smokers. Or people who have a risky job might also be required to pay more for life insurance, for example, if the job is physically demanding or the insured person has particularly risky hobbies.

You will be required to pay monthly premiums for as long as you determine your life insurance contract to last. Typically, you are advised to stay insured at least for as long as your children grow up to working age (after finishing education) and become financially independent adults or until you pay off any debts that you might have. Basically, you should consider staying insured for as long as your family needs financial compensation in the event of death.

Your life insurance policy premiums will not be the same as the next person’s because they are calculated according to your needs and circumstances.

Your life insurance premiums will depend on the following factors:

  • Policy type (joint/single names).
  • Needed coverage amount.
  • Length of policy.
  • Your health/lifestyle.

Popular Life Insurance Types in Germany

There are numerous life insurance companies in Germany which could possibly suit your policy preferences. You are always advised to shop around for the best option, whether it offers the right coverage and cost for your needs. According to Statista, Allianz Leben and R+V Lebensver AG were the leading life insurance companies in Germany in 2016, by gross written premiums.

Find a list of popular life insurance companies in Germany below:

  1. Allianz Leben. There are many advantages to an Allianz life insurance in Germany, from old-age provision to classic life insurance. Based in Stuttgart, Allianz has now garnered more than ten million customers across Germany, benefiting from its life insurance policies.
  2. R+V Lebensve AG. Serving customers in Germany and operating as an insurance company, R+V Lebensversicherung AG offers life insurance policies, as well as retirement, family, electronic, leisure, health, car, liability, and home insurance.
  3. Generali Leben AG. With approximately 10 million customers, this life insurance company is among the largest insurance groups in the German market. With innovative and individual solutions and services, it has managed to become among customers’ favorite.

Other types of insurance in Germany