You can generally only tell if you are well-insured after a long time, or when you have to make a claim. You should therefore think carefully about which coverage is right for you, regardless of whether you want to take out a new policy or are reviewing your existing contracts. We explain here how the different types of insurance work and what you should bear in mind before making a decision.
Life, pension and funeral expenses insurance
A life insurance policy provides economic coverage of the biometric risk (e.g. death, longevity, (occupational) disability) of the insured person. Another type of life insurance is private pension insurance. It guarantees a lifelong pension payment or a lump sum payment on retirement. Funeral expenses insurance in the form of industrial life insurance (also known as small death benefit insurance) is taken out to cover funeral costs.
Occupational retirement provision
In Germany, retirement provision stands on three pillars: The largely pay-as-you-go statutory pension provision system, occupational retirement provision and funded private old-age pension provision.
Third-party liability insurance
Third-party liability insurance is an important form of insurance that practically everyone needs. Culpable conduct can expose a person to unlimited claims by others. The insurer defends against such claims where they are unjustified (as with passive legal expense insurance) or pays compensation to the injured party where the claims are justified.
If you have private health insurance or are considering changing to the private health insurance system, you can find information here. BaFin only supervises private health insurers. Questions on statutory health insurance are dealt with by the German Federal Insurance Authority (Bundesversicherungsamt – BVA). The BVA supervises statutory health insurers which are responsible for more than three federal states. The other statutory health insurers are subject to supervision at federal state level.
Home contents insurance
Your home contents are all items found in a household that are used to furnish the same or intended to be used or consumed for private purposes. That also includes cash and valuables. Rule of thumb: All things that you take with you or would take with you when you move.
Buildings insurance pays for damage to buildings when caused by an insured risk (e.g. fire, tap water, storm/hail).
Motor vehicle liability insurance
In Germany, motor vehicle liability insurance is a must for every owner of a motor vehicle, without which no vehicle can be licensed (compulsory insurance). The reason behind this rule is that those injured by a motor vehicle must at least have the certainty that they will be compensated for any damage or loss suffered. Such insurance thus covers property damage, personal injury, financial as well as intangible losses.
Legal expenses insurance
A legal expenses insurer ensures that the policyholder can safeguard his or her legal interests and covers the expenses required for this purpose.
The term “travel insurance” covers all insurance offered in connection with a trip. Some examples are: travel cancellation insurance, travel baggage insurance, foreign travel health insurance, travel accident insurance and travel life insurance.
Both private and statutory accident insurance exist in Germany and have different benefits and a different legal basis. BaFin only supervises the private insurers.
Residual debt insurance
Residual debt insurance is a special form of term life insurance by which you can secure the repayment of a loan should you die during the term of the policy. In this way you protect your heirs. Residual debt insurance policies can be taken out with a constant or declining sum insured.
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