In the case of endowment life insurance, insured persons generally pay a monthly contribution and later receive the savings portion plus interest. With classic life insurance , a certain interest rate is guaranteed . This may not exceed the legally stipulated maximum interest rate and is also known as the guaranteed interest rate. In addition to the guaranteed rate of return, the provider also invests the insured in surpluses, which increases the return. However, these bonuses are not guaranteed and depend on the economic success of the insurer.
Due to the situation on the financial markets, the guaranteed interest rate has been repeatedly reduced in recent years. Currently, it is 0.9 percent (as of 2017). Since the providers are allowed to invest the capital of the insured with the classical variant only very surely, also the surpluses on average decreased. For these reasons, the classic variant has lost much of its appeal. Some insurers do not even offer them anymore.
Alternatively, there is the unit-linked life insurance. This offers higher return opportunities, but is also associated with a higher risk. If you are interested in a life insurance to protect the family and to build up capital, you should think carefully about which variant is best suited for your personal needs. An expert can explain the various advantages and disadvantages on the basis of his personal life situation and, where appropriate, recommend a suitable product.
Can one cancel the life insurance?
A life insurance can be terminated like any other insurance. However, any claims in the event of death or survival expire. In the case of capital-forming life insurance, insured persons have the right to have the insurer “buy back” their claims under the insurance contract . However, this repurchase value of the insurance is not only related to the amount of contributions paid so far.
Especially at the beginning of the insurance term, the contributions cover administrative costs and other fees. These can significantly reduce the surrender value compared to the previously paid premiums.
If you can not or do not want to pay contributions to life insurance at times, you do not have to cancel them immediately. It is often possible to agree with the insurer a deferral of the contributions, a contribution exemption or a payment from the surpluses . However, insured persons should bear in mind that this usually also shelves the insurance cover.
How is life insurance paid out?
The life insurance is paid out to the insured at the end of the term in the form of a one-off payment. Many insurers then offer a conversion of the insurance into an immediate pension . This option is recommended if regular pension payments make more sense to the insured than a one-time, larger sum of money.
How are the payments from life insurance taxed?
The benefits from a life insurance must be fully taxed for contracts from 2005 in the case of survival. That is, the revenue share is taxed at the personal tax rate, which is based on income.
However, only half of capital-forming life insurance is taxed if the insured person is at least 62 years old (since 2012) when the benefits are used and the contract has a minimum term of twelve years. If the benefits of the insurance are used earlier, the payment must be fully taxed.
Savings tip: Old contracts partly completely tax-free
Life insurance policies, which were concluded before 2005, are completely tax-exempt under certain conditions. For this, the benefit must be paid once, the contract has a minimum term of twelve years and the insured paid at least five years contributions.
Which is the right life insurance?
The offer of life insurance is diverse. Interested parties can get a good overview of the available offers on the basis of various life insurance test winners. However, this is only for initial orientation, since the individual needs mostly differ from those of the test customers. It makes sense, therefore, to be supported in the search for a suitable insurance by an expert .