Is dementia insurance worth it in Germany? Rarely as your only care cover. It pays only for dementia, so care after a stroke, fall or cancer is not covered. Dementia already counts fully in German statutory care insurance: care grade 3 brings EUR 599 a month in care allowance. In a care home you still pay about EUR 3,364 a month yourself. A daily care allowance policy for any cause closes that gap more broadly.
Statutory care benefits and premiums for a daily care allowance policy that also pays for dementia, with up to EUR 1,500 a month in care grade 5.
Example
Typical range
Daily care allowance, taken out at 40
about EUR 32 to 64 a month
Daily care allowance, taken out at 50
about EUR 52 to 99 a month
Daily care allowance, taken out at 60
about EUR 86 to 160 a month
Statutory care allowance at care grade 3
EUR 599 a month
Own share in a care home, first year
on average EUR 3,364 a month
Daily care allowance premiums from published market examples, March 2026;
statutory benefits from the Federal Ministry of Health overview 2026;
own share from the substitute health funds' association, July 2026.
Dementia only policies often cost less than a daily care allowance depending on age and benefit;
this is a guide value from our quoting practice, since they cover only one cause.
Worked example
Mother, 82, moderate dementia, care grade 3, moving into a care home
How big the gap is that dementia insurance or a daily care allowance is meant to close.
Own share in the care home, first year
EUR 3,364 a month
Mother's pension
EUR 1,600 a month
Gap without top up cover
EUR 1,764 a month
Daily care allowance at grade 3, example EUR 900
remaining gap EUR 864
Without cover over EUR 21,000 a year is missing. A payout tied to dementia would have helped here, but not after a stroke with the same costs.
What dementia insurance is
Dementia insurance (Demenzversicherung) is a private long term care top up that only pays once dementia has been diagnosed by a doctor and usually a certain care grade (Pflegegrad) applies. It then pays a monthly pension or a lump sum that you can spend freely.
The level of benefit, any waiting period and whether health questions are asked depend on the policy wording. Read above all which diagnosis is required and whether the payout is linked to a care grade.
How dementia counts in German statutory care insurance
For the care grade, the assessor checks six areas under Section 14 of Social Code Book XI, including cognitive and communication skills as well as behaviour and psychological problems. Dementia therefore leads to a care grade even if the body is still fit.
The gap in care home costs is the same for people with dementia as for everyone else in need of care, and this is where dementia insurance aims to help. The table shows what statutory care insurance pays per month.
Care grade
Care allowance at home
Home care service up to
Care home, fund's share
2
EUR 347
EUR 796
EUR 805
3
EUR 599
EUR 1,497
EUR 1,319
4
EUR 800
EUR 1,859
EUR 1,855
5
EUR 990
EUR 2,299
EUR 2,096
Dementia insurance or daily care allowance
A daily care allowance policy (Pflegetagegeld) pays at every care grade, whatever the cause: dementia, stroke, Parkinson's or an accident. Whether a policy already pays for dementia at low care grades is set out in its wording. For the same budget it is the broader solution.
Dementia only insurance can make sense as an extra if you already have a daily care allowance and want to insure a family history of dementia more heavily. As your only care cover it leaves the other common causes of care need open.
When dementia insurance is not worth it
You do not need separate dementia insurance if your daily care allowance already pays fully for dementia, or if your savings and pension can carry care home costs of over EUR 3,300 a month for years.
It is also the wrong choice on a tight budget: if you only have EUR 20 or 30 a month for care cover, put it into a policy that pays for every cause of care need.
What to check in the contract
Key points in dementia insurance are the required diagnosis, the waiting period, a premium waiver once you claim and whether the pension is paid for life. Also ask whether the premium may rise later.
If you are already being treated for memory problems you may fail the health questions. Plan dementia insurance while you are still healthy.
Step by step
Check whether you already have a daily care allowance and what it pays for dementia.
Calculate the possible care home gap against pension and savings.
Choose cover for every cause of care need first.
Consider an extra only if dementia runs in the family.
Answer health questions honestly, including about memory problems.
Compare premium development and premium waiver in care.
Checklist
Benefit for every cause of care need, not just dementia
Clear rule on the diagnosis required
Benefit from care grade 2 or 3
No premiums once benefits are paid
Lifelong pension rather than only a lump sum
Taken out before first symptoms
Common mistakes
Taking out only dementia insurance and forgetting other causes of care
Assuming German care insurance pays nothing for dementia
Applying too late, when memory problems are already treated
Looking only at the premium instead of the benefit per care grade
Questions and answers
Frequently asked
Does German care insurance pay for dementia?
Yes.
Mental abilities and behaviour count towards the care grade.
At care grade 3 you receive EUR 599 care allowance a month.
Can I take out dementia insurance for my parents?
Only while they are healthy and can answer the health questions without a diagnosis.
Once dementia has been diagnosed it is too late.
Is a daily care allowance better for dementia?
Usually yes, because it pays for any cause of care need.
Check whether the policy pays for dementia at low care grades.
Do I have to spend the money on care?
With a pension or daily allowance usually not.
You can use the money freely, also for relatives who provide care.
