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More information about life insurance
Capital-forming Classic Life Insurance:
What is insured?
The death of the insured before the expiry of the contract. The survival of the insured person, i. the achievement of the contractually agreed final age. In normal life insurance, the sum insured for death and survival (for example reaching the final age of 65) is the same. However, some insurers also offer the possibility of concluding a capital-forming life insurance policy with an increased death benefit or an increased endowment benefit.
There are also variants with initially reduced contribution or initially reduced death benefit. No one can predict exactly how much the retirement benefits (the payout amount, consisting of guaranteed sum insured and withholding tax) will actually be on reaching the contractually agreed end age.
The life insurance companies use sample calculations, which assume that the results achieved so far are also valid for the future. These example calculations are not binding, but give only a hint.
The duration of the contract should be based on the age at which the working life ends and the accumulated pension capital is needed.
Of course, which final age you choose also depends on the changing legal parameters – especially the corresponding pension reforms. If you want to retire earlier, you have to expect deductions.
Insurance companies take this fact into account by no longer setting a fixed expiry date. Instead, you choose a (eg) five-year period, the so-called expiration phase. So if you want to retire between the age of 62 and 67, this would be your expiration phase. With the beginning of the agreed profit participation is fully available and will be paid on demand at any time.
Of course, the 12-year term must be adhered to in order to maintain the tax credit for life insurance. The earlier you take out capital-forming life insurance and the longer it lasts, the higher your insurance cover can be achieved with relatively low contributions.
How is the profit participation?
As things stand today, you can expect the sum insured to double in a typical contract after 25 to 30 years.
The average contract duration of a life insurance contract is 27 years, during which the paid savings contributions are invested at least 90% (usually 97%). Here, the contributions are fixed from the outset over the entire term.
In order to be able to provide the guaranteed insurance benefits also in the future, very cautious assumptions are made in the calculation bases for the calculation of the contributions. Interest rates, mortality and costs are important factors. Due to the contribution calculation (assumptions about recoverable interest rates, mortality experience, administrative costs) and the profitable investment of the contributions (higher return than assumed), mortality surpluses (the actual mortality may be less than calculated) and lower administrative costs (as calculated in the contribution calculation), life insurance companies incur surpluses.
Dynamic life insurance:
Be optimistic that your income and standard of living will increase over time. It follows that there are growing demands on the future supply and thus on the amount of the insured sum. To take account of this development, the conclusion of a dynamic life insurance offers. With this up-to-date capital-forming life insurance contribution and sum insured are increased at regular intervals. The benchmark is the increase in the maximum contribution in the statutory pension insurance of workers and employees. However, there are other ways to increase it. Another advantage of the dynamic life insurance is that the increase in life insurance is not dependent on a renewed health check. Thus, diseases that arise during the course of the contract do not affect the increases. And you have the opportunity to temporarily suspend one or a maximum of two increases in a row. However, more than two suspensions lead to renewed health checks.
Fund-linked vs. Capital-forming (classic) life insurance:
The difference to the capital-forming life insurance lies in the different formation of the risk and savings portion, which is to provide the capital formation for the insured sum agreed in the benefit case. The unit-linked life insurance has a better performance – but also a higher investment risk. Because while the savings portion of the classic