Capital life insurance
Life insurance with capital option in comparison
Provide with life insurance for old age? High costs and low returns have discredited the combination of old-age provision and survivors‘ insurance. When is a policy worthwhile and what you should pay attention to, our guide tells you.
Initial information – Initial information for insurance brokers in accordance with § 11 VersVermV read and download.
The opinions on capital life insurance vary widely: from “not only” to “worthwhile”. This product is the Germans‘ favorite retirement product. Statistically, every citizen has a policy in his insurance folder.
However, the reduction in the guaranteed interest rate as well as decreasing bonuses are scratching the image of the capital LV. At the same time, savers are unsettling the reports of high closing and administrative costs.
Differentiation options in life insurance
A life insurance Above all, it serves its own protection in old age. In addition, they can also cover the risk of occupational disability. In addition, a protection of the survivors is possible. Depending on the desired benefits, various insurance policies are available. This is the capital-forming life insurance as well as the term life insurance.
A capital-forming insurance serves above all the Hedging in old age. Depending on the desired form is a payment of insurance as one-time payment or by one lifetime monthly pension possible. In addition to this capital-forming insurance but also pure risk insurance can be completed. In practice, however, these insurance policies are only applied in rare cases, mostly combinations of capital-forming insurance and risk insurance are offered. For such insurances, the policyholder receives a monthly pension in the event of disability. The situation is similar with survivor protection. If no agreements have been made with regard to survivor’s protection, the heirs will at least be entitled to paid contributions.
In some cases, insurance companies also offer free continuation in the event of occupational disability in the case of capital-forming retirement provision. Due to the different regulations of the individual companies, life insurance offers should always be compared exactly. In addition, it should also be noted in a comparison that a distinction is made between the minimum performance and the non-guaranteed forecast values. For this reason, a comparison is often difficult.
Pitfalls and traps in life insurance
Most life insurance offers are not comparable. The reason for this lies in the different contract design as well as the uncertainty of the calculated forecast values. For this reason, it is recommended to use one life insurance to pay attention to the forecasting accuracy of the companies in the past. In general, it can be assumed that companies that have exceeded their forecasting values in the past are careful to calculate. In contrast, companies that have made too high promises are more likely to keep their distance.
Further caution should also be given in the area of occupational disability. In securing the age or death, these can be proven beyond doubt. The situation is different with regard to the risk of occupational disability. In some societies, the recognition of disability is very expensive. Not infrequently, the status of disability is recognized only after years. In older contracts in particular, referral clauses exist in some cases. These state that a policyholder is not considered unfit to work if he could work in another reasonable area. In this context, it should be recalled that another occupation is not automatically unreasonable due to lower wages.
Due to these different aspects should be a regular review of the conditions of life insurance respectively. Similarly, a comparison with offers from other companies makes sense. However, not only tests, but also experience reports of other insured persons in the event of benefits are available for this purpose.
Basically, there are different types of life insurance. In addition to the private life insurance Above all, the state-subsidized models such as Riester and Rürup, but also the company pension plan. Irrespective of the model, tax privileges can not be claimed until the age of 60 at the earliest. Furthermore, different conditions are imposed on the term or the contribution period.
Depending on the type of insurance and the date of the insurance, various tax regulations apply. In the case of occupational pensions, contributions to the insurance are generally paid in without income tax and without social contributions. In these forms, a subsequent taxation takes place.
In the case of a private life insurance contract with an insurance commencement before 01/01/2005, capital life insurance is tax-exempt under the condition that the minimum retirement age and duration of insurance have been respected. When claiming a pension, only the income part, ie the difference between the benefits and the contributions paid, is taxable.
The situation is different for contracts concluded on 01.01.2005. For these, there is a general tax liability for capital payments. Also, the pension received in half the extent is subject to the personal tax rate. However, policyholders of such a contract may benefit from tax benefits during the saving phase. With this insurance, the taxable income and hence the tax debt decrease.
Advantages and disadvantages of life insurance
Basically enjoyed Life insurance with a capital option long time great popularity. The reason for this was the flexibility of the investment as well as the protection and the provision for old age. Meanwhile, one is Endowment policy With a new contract due to the tax change no longer so attractive. Nevertheless, this form of hedge still has its right to exist due to the legally guaranteed minimum return and the consequent security of this investment. Although critics complain that a capital-forming life insurance due to the prescribed investment structure, insurance companies may invest, for example, only 30 percent of the capital in equities, is very low-yield. However, the experience of the financial crisis has shown that equities are subject to very high risks. For this reason, a risk-conscious investment can be a very good choice.
In principle, the consumer should note, however, that in a life-sized capital insurance life savings for the age takes a few years. The initial paid-in contributions are used up on a large scale to cover the risk of death as well as fees. It should also be noted that in the case of capital-forming life insurance, the early exit is usually associated with high financial losses. For this reason, the Endowment policy only as long-term investment It is not suitable for bridging liquidity bottlenecks.
Tips on life insurance
Given the jungle of companies and tariffs, it is helpful if you are close to the conclusion of the Capital life insurance tips respected. First of all, one should inform oneself about the state funding possibilities. Those who receive the supplements for the Riester pension or who use the tax incentive for the Rürup pension can earn a higher return than for the endowment policy. Since the production quotas depend on the individual tax and family situation, we recommend the advice of an independent expert.
Since the capital insurance includes a risk protection, the person to be insured must at the application Questions about health answer. Important is the correct and conscientious answer. Otherwise, the insurer may retroactively withdraw from the contract or refuse to pay. Helpful is the consultation with your own family doctor. As a rule, this is also stated in the application, so that the insurance company can turn to an expert for medical questions.
The Endowment policy Basically it can be useful for everyone – no matter if you are Employee, civil servant, freelancer or self-employed is actively working. Those who want safety and want to provide for their survivors in the event of death are in the right place with their life insurance.
Which additional modules are available?
The Endowment policy includes old-age provision and death protection. In addition, occupational disability protection may be included. In the case of long-term incapacity for work, the insurer either pays the life insurance premiums or receives an additional monthly pension.
In addition one should one Polling and postponement function integrate. This means that the capital can not only be called up at the agreed end of the term, but sooner or later. This gives you the flexibility of long-term insurance contracts.
Who should be included as a beneficiary in the contract?
Basically, the policyholder can with the revocable subscription right name a person of his choice (such as spouse, child) who will receive the benefits in the event of death. The so-called entitled person can be changed at any time. This is only possible if an irrevocable subscription right has been agreed. In this case, the beneficiary must be admitted.
The beneficiary receives in the Death of the policyholder either a monthly pension for life, or as part of the residual capital settlement, the contract value less the pension already paid. In the case of endowment life insurance, moreover, a death penalty is agreed, which is paid out to the surviving dependents upon death during the first years of the contract. Because at the beginning of the contract, the services are relatively low due to the low deposits and accumulation period. Only in the course of time does the contract value exceed the agreed death benefit.
What tariffs are there with the endowment insurance?
In the case of capital insurance, a large number of different tariffs can be distinguished. To get a suitable insurance, we list in the tips Endowment policy the different types:
- Capital life insurance for death and survival (mixed life insurance) Capital life insurance on two connected lives (two insured persons with insurance on the death of the first person),
- Training insurance (Termfix insurance),
- Life insurance with life-long death protection (Funeral insurance).
The types presented differ in terms of the insured persons and the duration of the death protection. The capital investment and the surplus systems are identical. The rules on the surrender value are the same. Due to the various insurance options you should get comprehensive advice.
Sell life insurance
The classic capital-forming life insurance for the private pension or as a savings model now has the reputation of a phasing out model. This is partly due to the abolition of the tax exemption for endowment life insurance and falling guaranteed interest rates. Many life insurance customers therefore want to get out of their current contract.
Capital life insurance is becoming increasingly popular as a cash injection for in between. Those who need a larger amount of money in the short term like to fall back on his already considered unprofitable life insurance. Who wants to sell his life insurance, must first find a suitable provider. Life insurance policies are bought by various policy traders who specialize in the purchase of insurance contracts. However, it should be noted here: Anyone who wants to sell his life insurance must submit with his contract various minimum requirements such as a minimum surrender value, remaining maturity and usually an integrated term life insurance.
Anyone who wants to get out of his life insurance, should consider this step well. This is especially true for contracts that are still tax-exempt and that were concluded before 2005. Insurance customers, who nevertheless want to sell their life insurance, receive at their company the agreed repurchase value, which is however with younger contracts usually under the paid contributions. In addition to a repurchase and sale of life insurance, there is also the option of first providing the policy without contributions. Thus, the contract remains, the budget does not burden in times of financial constraints but not more.
If life insurance becomes too expensive, cutting the integrated momentum lowers the contributions. For many insurers, loans in the amount of the surrender value are available, but cause higher interest rates. An exit from life insurance is generally more worthwhile in the case of young, unprofitable contracts and when switching to a more attractive form of retirement provision. On the other hand, whoever pays many years into his life insurance and receives the earned capital tax-free stays in the contract better.
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