Can I cancel my term life insurance in Germany?

What a new policy costs after cancelling, from published tariff examples and tests, healthy non-smokers.

The German Insurance Contract Act (VVG) lets you end a life policy at any time with effect from the end of the current insurance period. If you pay monthly, that is normally the end of a month; if you pay yearly, the end of the policy year. Your terms set the exact notice, often one month.

Send a written notice (Kündigung) with your policy number, the date you want the cover to end and a request for confirmation. Letters in English are usually accepted, but a short German sentence avoids delays. If the policy is assigned to your bank as security for a mortgage, talk to the bank first.

A German Risikolebensversicherung works like term cover in the UK or US: your premiums pay for protection during the term and nothing is saved. The law only requires a surrender value where a payout is certain, as with an endowment policy. Term cover is not such a policy.

On long terms with level premiums a small reserve can build up, because you pay a little more in the early years than your risk costs. Whether any of it is paid out depends on your terms. Do not count on it.

Many German term policies keep running if you move abroad, as long as you keep paying from a euro account. Check the clause on residence abroad before you move. If the policy still covers you, keeping it is often better than buying new cover in your next country at an older age.

If you came to Germany with a policy from home, compare both before you cancel either. Paying twice for the same need makes no sense, but a gap is worse.

There is often a better route than ending the cover. The table shows the options.

Prices vary widely. In a German consumer test, expensive policies cost almost three times as much as cheap ones for the same cover. But a new policy is priced on your age and health today.

Three things also restart: the health questions, the period in which the insurer can withdraw over wrong answers, and the suicide exclusion, which usually applies for the first three years. So cancel the old policy only after the new one is accepted in writing.

Once the mortgage is paid, the children earn their own money and your partner has their own income, the cover is no longer needed. Then every further premium is wasted.

To be honest, many people cancel too early. Whoever cancels during a short squeeze and falls ill two years later often gets no new cover, or only with a large surcharge.