Should I cancel my German disability insurance?

What cancelling and later reapplying can cost. Premium examples come from published German tariff examples and show how age and end age move the price.

The most valuable part of your BU is not on the premium notice. The insurer accepted you with your health on the day the policy started. Back trouble, therapy or high blood pressure that appeared since then no longer matter for that contract. A new application asks about all of it again and can lead to exclusions, loadings or rejection.

Age adds to that: the later you apply, the more the same cover costs. A standalone BU also builds no savings, so on cancellation you usually get nothing back. The premiums you paid bought cover for the past years; they were not an investment.

There are good reasons. If you are a few years from retirement and your savings carry you until then, you may no longer need the cover. If you become a civil servant with disability cover of your own, the old BU may be redundant. And if a new policy with clearly better terms has been accepted, switching makes sense.

Moving away from Germany is not automatically a reason. Many BU policies keep paying abroad, and finding comparable cover in your new country can be hard. Read the residence clause first. A short cash squeeze is a poor reason too: there are better ways that keep the cover.

Deferral (Stundung): many insurers let you pause premiums for some months while cover continues. You pay the deferred premiums later. This fits parental leave, unemployment or setting up a business.

Paid-up policy (Beitragsfreistellung): under section 165 VVG you can ask for the contract to continue without further premiums if an agreed minimum benefit is reached. With a pure BU often only a small benefit is left, so ask for the figure first. A third way is a lower benefit: EUR 1,000 instead of EUR 1,500 is better than nothing, and an increase option (Nachversicherungsgarantie) often lets you raise it again later without health questions.

German BU contracts usually show a gross premium (Bruttobeitrag) and a lower payment premium (Zahlbeitrag). The difference is covered by surpluses. If surpluses fall, the payment premium rises, at most up to the gross premium. That is built into the contract, not a breach of it.

Before switching for that reason, compare the new payment premium with a quote for a new policy at your current age. The old contract is often still cheaper. If the increase comes from agreed indexation, you can usually decline it without cancelling.

Cancel the old BU only after the new policy is accepted and cover has started. Answer the new health questions fully. Under section 21 (3) VVG the insurer can rescind for negligent wrong answers for five years and for intentional ones for ten. Your old contract no longer carried that risk after some years.

If your BU is a rider to a life or pension policy, it ends with the main contract. Check before cancelling the main policy. A BU through your employer can often be continued privately when you change jobs; ask before you leave.