Life insurance in Germany: do expats really need it and what should they pay attention to?
If you’re living in Germany and wondering whether you need life insurance, you’re not alone. It’s one of those things that might seem unnecessary, until you realize how much peace of mind it can bring.
In this guide, we’ll break down the two main types of life insurance, help you figure out if you actually need it, and walk you through how to find the best policy for your situation.
If you have any questions, feel free to use the comments section. I answer each question personally.
TL;DR – Do you need life insurance in Germany?
This guide is crafted to give you a very detailed look on the topic. Here are the main facts.
- If you have dependents (spouse, kids, family abroad) or a mortgage, life insurance is a smart financial safety net.
- Term life insurance (Risikolebensversicherung) is usually the best option-it’s affordable, flexible, and purely for financial protection.
- Whole life insurance (Kapitallebensversicherung) includes a savings component but is expensive and not ideal for expats.
- Coverage should be minimum 3-5x your gross annual salary or at least enough to cover outstanding debts.
- Expats should check if their policy remains valid if they move abroad.
- Unmarried couples should consider a cross-contract (Überkreuz-Vertrag) to avoid inheritance tax on payouts.
- Prices vary by age, health, lifestyle, and policy length-a healthy 36-year-old can expect ~21-30€/month for a 250,000€ term policy.
- Compare providers like Feather (English support), Getsurance, Allianz, Huk24, and CosmosDirekt to find the best deal.
- If no one depends on your income and you have no debts, you probably don’t need life insurance.
Who actually needs life insurance in Germany?
Life insurance in Germany is particularly important for:
- You have financial dependents (spouse, kids, family abroad) who rely on your income to cover daily living expenses, education, and future financial needs. The death benefit can provide a financial safety net and maintain their standard of living.
- You have a mortgage or significant debts such as personal loans or credit card debt. Life insurance can ensure your family can pay off these obligations and avoid financial hardship, such as losing their home.
- Your partner relies on your income to meet household expenses. Even if both partners work, the loss of one income can create a significant financial gap. Life insurance can provide income replacement for a certain period.
- You’re a business owner with liabilities or if your business would suffer significant financial loss due to your passing. “Key person insurance” can help ensure business continuity.
On the other hand, if you are debt-free, don’t have loved ones financially dependent on you, and have savings, then term life insurance might not be necessary.
Term life vs. whole life insurance in Germany
Life insurance in Germany can be divided into two main categories:
Term life insurance (Risikolebensversicherung):
This type is generally more affordable and focuses purely on financial protection in case of premature death. It’s often recommended for covering periods of high financial responsibility, like raising children or paying off a mortgage.
- Covers dependents if you pass away during a fixed period (5-30 years).
- Generally affordable.
- Pays a lump sum to beneficiaries upon death within the term.
- Can be chosen with different options:
- Level term policies: The coverage amount remains the same throughout the policy.
- Decreasing term policies: The coverage amount decreases over time, often matching a repayment mortgage.
- Increasing term policies: The coverage amount increases over time to account for inflation, but these are generally more expensive.
Permanent life insurance (Kapitallebensversicherung):
This policy is valid for your whole life, and your family receives a payout whenever you pass away.
- Provides lifelong coverage as long as premiums are paid.
- Often includes savings/investment components.
- Generally more expensive than term life insurance.
- Savings component has low guaranteed interest rates.
- Accessing the savings before death can be costly (loan with interest) or means canceling the death benefit.
- Your family will typically only receive the death benefit, not the amount in the savings account, upon your death. Term life insurance is usually cheaper, allowing you to invest the difference in options with potentially higher returns.
- Not recommended for foreigners in Germany.
Comparing term vs permanent
| Feature | Term life insurance (Risikolebensversicherung) | Permanent life insurance (Kapitallebensversicherung) |
|---|---|---|
| Coverage Duration | Fixed period (e.g., 10, 20, 30 years) | Lifetime coverage (as long as premiums are paid) |
| Payout condition | Only pays out if the insured dies during the term | Pays out whenever the insured dies |
| Premiums | Lower and fixed for the term duration | Higher and usually increase over time |
| Savings component | ❌ No savings or investment feature | ✅ Includes a savings or investment element |
| Best for | Protecting dependents during high-responsibility years (kids, mortgage, etc.) | Long-term wealth planning, estate planning |
| Cancellation | Can be canceled anytime without financial loss | Canceling early can result in losing money |
| Investment returns | ❌ No returns – purely protection | ✅ Small guaranteed returns, but often low compared to other investments |
| Flexibility | Can choose policy length & amount based on needs | Less flexible due to long-term commitment |
| Affordability | ✅ More affordable (e.g., 20€-30€/month for 250,000€ coverage) | ❌ Expensive (3-5x higher than term policies) |
| Payout amount | Fixed lump sum to beneficiaries | Lump sum + possible small accumulated savings |
| Who should get it? | Families with financial dependents, mortgage holders, young professionals | High-income individuals looking for estate planning or forced savings |
| Recommended for expats? | ✅ Yes, it’s affordable and easy to cancel if moving | ❌ Not recommended – high costs & low flexibility |
How much does it cost?
The monthly payment for term life insurance depends on factors such as your age, health, and lifestyle:
- Age: Younger individuals typically pay lower premiums.
- Health status: Pre-existing conditions can increase premiums.
- Lifestyle: Habits like smoking and risky hobbies can raise costs. Smokers might pay significantly more.
- Medical history: Family history of certain illnesses might affect premiums.
- Policy length: Longer policy terms generally cost more.
- Coverage amount: Higher death benefit amounts result in higher premiums.
- Occupation: High-risk jobs can lead to higher premiums.
For example, a term life insurance policy in Germany for a healthy, non-smoking 36-year-old with an office job can cost between 15 to 30 euros a month for a 20-year term with 400,000 euros coverage. For a 200,000 euro coverage, the annual cost can range from 100 to 300 euros.
How find the best deal:
- Compare quotes from multiple providers. Online comparison platforms or direct requests to insurers are options.
- Consider the net premium (current cost) and the gross premium (maximum potential cost). Some providers offer guaranteed premiums.
- Be truthful in your application to avoid issues with payout later.
- Consider consulting an independent insurance broker who can help you compare various offers tailored to your situation.
Best life insurance providers in Germany for expats
| Provider | Language | Coverage | Key Features |
|---|---|---|---|
| Feather | English | Up to €400,000 | Fully digital, no add-ons |
| Getsurance | German | Up to €250,000 | Some add-ons available |
| Allianz | German | Up to €10 million | Big provider, not 100% digital |
| Hannoversche, Huk24, Europa, Cosmosdirekt | German | Varies | Well-known insurers, competitive rates |
- Feather: An expat insurance provider with a fully English and digital platform, offering online sign-up and a maximum cover of 400,000 euros. It does not offer add-ons or cross-contracts.
- Getsurance: A fully digital provider (German only) with a maximum cover of 250,000 euros. It offers some add-ons.
- Allianz: A large, renowned insurance company (German only) with a maximum cover of up to 10 million euros and various possible add-ons, including cross-contracts. It is not 100% digital.
- Other recommended providers (primarily in German) include Hannoversche, Huk24, Europa, and Cosmosdirekt.
How to choose the right policy
As an expat in Germany, consider the following when choosing a life insurance policy:
- Language support: If you prefer English, Feather is a primary option. Other providers are mainly in German.
- Coverage amount: Determine the amount needed to cover your family’s financial needs, including outstanding debts, mortgage, and living expenses. A common rule of thumb is to insure 4-5 times your gross annual salary if you have children and 3 times your gross annual salary if you only want to protect your partner, plus any outstanding debts.
- Policy length: Choose a term that aligns with your financial responsibilities, such as until your children are financially independent (around age 25) or until your mortgage is paid off. Common terms range from 5 to 30 years. It’s generally better to opt for a slightly longer term, as extending it later can be difficult.
- Truthfulness in application: Answer all questions about your health, lifestyle, and hobbies truthfully. Lying can lead to the insurance company refusing to pay out in case of death.
- Extra policy features: Decide if you need additional features like a post-insurance guarantee, extension option, early payout for critical illness, or contribution exceptions in case of disability. These will increase your monthly premium.
- Inheritance tax: Be aware of German inheritance tax rules for life insurance payouts. Spouses have a higher tax-exempt amount (€500,000) than unmarried partners (€20,000). Unmarried partners should consider a cross-contract (Überkreuz-Vertrag) where each person takes out a policy insuring the other. This can help avoid inheritance tax on the payout.
- Financial stability and reputation of the provider: Choose a reputable insurer with a strong financial rating and good customer service.
Expats: pay attention to this when signing up
International coverage:
It is crucial to check the terms and conditions of any policy you consider or consult with the insurance provider directly to understand the geographical scope of coverage. You should inquire if the policy remains valid if you reside outside Germany or if there are any restrictions on payouts to beneficiaries living abroad.
Contract length & cancellation rules:
While term life insurance is for a fixed period, understand the terms and conditions regarding cancellation before the term ends. The sources mention that if you no longer need the insurance (e.g., children are grown), you can often cancel the policy. However, note that premiums paid are generally not refunded upon cancellation. Avoid getting locked into permanent life insurance policies if you are unsure about long-term residency.
Health checks & pre-existing conditions:
Like with private health insurance, Some insurers in Germany might require a medical examination to assess your health before offering coverage. Be prepared to answer detailed health questionnaires truthfully. Pre-existing conditions can lead to higher premiums or even refusal of coverage. It might be helpful to consult an insurance broker who can anonymously inquire with different providers about coverage options for individuals with pre-existing conditions.
Tax benefits & payout rules:
- Income tax: Life insurance payouts in Germany are generally free of income tax, regardless of the amount.
- Inheritance tax: This can be tricky. As mentioned earlier, spouses and registered partners have a higher tax-exempt amount (€500,000) than unmarried partners (€20,000). Consider cross-contracts for unmarried partners to potentially avoid inheritance tax. The inheritance tax is calculated on all assets inherited, including life insurance payouts.
My own experience with life insurance
Signing up for life insurance with Feather was surprisingly smooth and hassle-free. The entire process was digital, which made everything quick and easy to manage from the comfort of my own home. I appreciated how straightforward their website was, with clear, English-language options and a transparent breakdown of coverage options.
- I picked a term life insurance.
- 16,95€/month for 400 000€ coverage.
- From 2022 to 2042.
- Valid anywhere in the EU.
The sign-up process itself was a breeze, and I didn’t feel overwhelmed by jargon or fine print. The ability to customize the coverage to fit my needs, without the pressure of pushy sales tactics, really stood out.
FAQs – Life insurance in Germany for expats
It is a voluntary financial protection measure.
Some providers let you do that. You would need to check the specific terms and conditions of your policy or contact your insurance provider to understand the portability of your coverage if you move out of Germany.
Generally, a life insurance policy from your home country might remain valid depending on the insurer’s international coverage terms. However, it’s advisable to review your existing policy and consider whether it adequately covers your needs and beneficiaries in Germany, taking into account German laws and tax implications. You might still need a German policy, especially if you have significant assets or liabilities in Germany.
Sources
- Klotz, M. (2023, June 5). Risikolebensversicherung: Die Familie vor dem Ruin schützen. https://www.finanztip.de/risikolebensversicherung/
- Risiko-Lebensversicherung: Schutz im Todesfall | Verbraucherzentrale.de. (n.d.). Verbraucherzentrale.de. https://www.verbraucherzentrale.de/wissen/geld-versicherungen/weitere-versicherungen/risikolebensversicherung-schutz-im-todesfall-102965
- Warentest, S. (2023, January 17). Risikolebensversicherung im Vergleich: Angehörige gut und günstig absichern. test.de. https://www.test.de/Risikolebensversicherung-Vergleich-4848109-0/