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When is the premium refund in German private health insurance worth it?

In short

When is the premium refund (Beitragsrückerstattung) in German private health insurance worth it? When your medical bills for a year are lower than what you get back after tax. Depending on the policy, the insurer refunds about two to six monthly premiums for a year without claims. Submit the bills instead if they are higher or a larger treatment is coming up.

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When is the premium refund in German private health insurance worth it?

What it costs

Published ranges for premium refunds in German private health insurance and for the tax effect.

Example	Typical range
Refund depending on the policy	about 2 to 6 monthly premiums
Top values of individual policies	up to about 50 percent of an annual premium
EUR 3,000 refund at a 42 percent marginal tax rate	about EUR 1,740 after tax
After several claim free years	often 4 to 6 monthly premiums
EUR 600 monthly premium, refund of 3 monthly premiums	EUR 1,800 before tax

As of October 2026, from information by the association of private health insurers and from guides.

The share of basic cover and the tax rate in the worked example are guide values from our quoting practice.

We can check how your policy handles the refund and which benefits do not count against it.

Worked example

Self-employed, 38, monthly premium EUR 600

Her policy refunds three monthly premiums. Over the year she collects bills of EUR 700. Marginal tax rate 35 percent, about 80 percent of the premium relates to basic cover.

Refund, three monthly premiums	EUR 1,800
Of which relates to basic cover for tax, about 80 percent	EUR 1,440
Extra tax because fewer premiums are deductible (35 percent)	about EUR 500
Refund after tax	about EUR 1,300
Bills paid herself	EUR 700

Paying herself leaves her about EUR 600 better off than submitting. From bills of about EUR 1,300 a year it turns the other way. Calculated with guide values.

How the refund works

In German private health insurance (PKV) you usually pay the doctor yourself and then submit the bill. If you submit no bills for a whole calendar year, the insurer pays back part of your premiums. This is assessed separately for each tariff in your contract: a dental bill does not necessarily cost you the refund on the outpatient tariff.

There are guaranteed refunds fixed in the contract and profit based ones that depend on the insurer's results and are set anew each year. If you switch insurer, open claims are usually lost.

The maths: when paying yourself is worth it

Collect your bills through the year and decide at the end. Paying yourself only pays off while the total stays below the refund after tax. Bills you pay yourself also cannot be deducted again as special expenses.

The table shows the decision for a refund that leaves about EUR 1,300 after tax.

Bills in the year	Refund after tax	Better choice
EUR 300	about EUR 1,300	pay yourself, about EUR 1,000 ahead
EUR 900	about EUR 1,300	pay yourself, about EUR 400 ahead
EUR 1,300	about EUR 1,300	no difference, rather submit and restart the scale
EUR 2,000	about EUR 1,300	submit
Larger treatment coming up	lost anyway	submit early

The tax effect

Premiums for basic cover, meaning benefits roughly at the level of statutory health insurance, are deductible as special expenses (Sonderausgaben) in your German tax return. A refund reduces these deductible premiums in the year it is paid. Part of the benefit is therefore lost to tax.

At a marginal tax rate of 42 percent, about EUR 1,740 of a EUR 3,000 refund remains if the full amount relates to basic cover. For employees the tax free employer contribution is also offset, so clarify the details with your tax adviser.

Refund or deductible?

A deductible (Selbstbehalt) lowers the premium for certain, every month. A profit based refund is not guaranteed. So compare policies by the premium minus the guaranteed refund, not by the highest possible amount.

A policy with a high refund is not automatically cheaper. Benefits come first, because you keep them for life.

When it is not worth it

If you are chronically ill, need regular medication or have children on your policy, you are usually better off submitting. And if money is tight, do not advance bills for months.

Never put off necessary treatment because of the refund. A neglected illness costs more in the end than two monthly premiums.

Step by step

Check your policy terms: amount of the refund, guaranteed or profit based, benefits that do not count, and the deadline for submitting bills.
Collect bills through the year and pay them yourself at first if you can afford it.
Before the deadline, add up the bills per tariff.
Estimate the expected refund after tax.
Submit if the bills are higher, otherwise keep them.
Submit at once if an expensive treatment is foreseeable.

Checklist

Amount and scale of the refund in your own policy known
Guaranteed and profit based parts kept apart
List of benefits that do not count, such as check-ups and vaccinations
Deadline for submitting old bills noted
Tax effect included in the calculation
Bills filed by tariff

Common mistakes

Counting on the highest possible refund instead of the guaranteed one
Forgetting tax and overestimating the benefit
Putting off necessary treatment to save the refund
Missing the deadline for submitting and being stuck with the bills

Questions and answers

Frequently asked

Do check-ups count against the refund?

Not in many policies. Check-ups and vaccinations are allowed there. Look in your terms.

Do I lose the whole refund if I submit a dental bill?

Not necessarily. The refund is calculated per tariff. A bill under the dental tariff usually leaves the outpatient tariff untouched.

Do I have to pay tax on the refund?

It is not income, but it reduces your deductible premiums in the year it is paid. Your tax goes up a little as a result.

What happens to the refund if I switch insurer?

Open refunds not yet paid are usually lost. Switch after the payment if you can.

I am leaving Germany. Do I still get the refund?

If your policy ends before the payment date, an open refund is usually lost. Ask your insurer before cancelling whether you can time the end of the contract after the payment.

As an employee, do I get the whole refund?

It is paid to you. For tax it is offset against the employer contribution; your tax adviser can clarify the details.

Is a high refund a reason to choose a policy?

No. Benefits are what matter. The refund is a bonus for healthy years, not a substitute for good cover.

Sources

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