What does profit participation bring in German term life insurance?
In short
Profit participation (Überschussbeteiligung) in German term life insurance mainly brings you a lower premium. With premium offset you pay the net premium, in published examples about a third below the gross premium. This is not guaranteed: if profits fall, the premium may rise up to the gross amount. The other form, a death bonus, raises the payout instead.
Net and gross premiums from insurers' published sample calculations.
Example
Typical range
Age 37, EUR 250,000, 15 year term
net EUR 10.20, gross EUR 15.94 a month
Age 32, EUR 500,000 decreasing, 20 year term
net EUR 7.67, gross EUR 11.99 a month
Age 43, EUR 1,000,000, 10 year term
net EUR 49.06, gross EUR 76.66 a month
Age 27, non-smoker, EUR 100,000, 10 year term
from EUR 1.73 a month after surplus offset
Customers' minimum share of the risk result
90 percent, of other results 50 percent
As of October 2026, from the sample calculations and legal sources listed.
We worked out the gap of about 36 percent between net and gross premium from these examples;
it does not apply to every tariff.
The worked example is a guide value from quoting practice.
Worked example
What happens if surpluses disappear
A couple covers a EUR 250,000 mortgage over 15 years and compares two quotes with almost the same net premium.
Quote A: net premium
EUR 10.20 a month
Quote A: gross premium
EUR 15.94 a month
Quote B: net premium
EUR 10.50 a month
Quote B: gross premium
EUR 12.00 a month
Extra cost in the worst case over 15 years
A about EUR 1,030, B about EUR 270
A is slightly cheaper today but much dearer in the worst case. If you want predictability, take B. Quote B is a hypothetical comparison, a guide value from quoting practice.
Where the surpluses come from
Insurers price cautiously. If fewer policyholders die than assumed, costs are lower or investments earn more, a surplus arises. In term life insurance it comes mainly from the risk result, meaning fewer deaths than planned for.
Section 153 of the German Insurance Contract Act (VVG) gives you a right to share in these surpluses. It can only be excluded expressly and only entirely. The minimum that must go to customers is set by the Mindestzuführungsverordnung: 90 percent of the risk result, 90 percent of investment income after guaranteed interest and 50 percent of other results. This applies to the whole portfolio, not as a promise for your individual policy.
Premium offset or death bonus
Most tariffs offset surpluses against the premium immediately. Insurers call this Sofortrabatt, Sofortgewinnbeteiligung or Beitragsverrechnung. You pay the lower net premium (Zahlbeitrag), and the sum insured is fixed. If surpluses fall short, your premium rises, at most to the gross premium (Bruttobeitrag).
With a death bonus (Todesfallbonus) you pay the full premium, and surpluses increase the amount paid out on death. The bonus can fall. If you are covering a mortgage, plan only with the guaranteed sum, not the bonus.
Feature
Premium offset
Death bonus
What you pay
lower net premium
full gross premium
Sum insured
fixed
base sum fixed, bonus on top
If surpluses fall
premium rises, at most to the gross premium
bonus and payout fall
Predictability
sum certain, premium not
premium certain, bonus not
Suits
mortgages and tight budgets
those who want the highest possible sum
Reading net and gross premium
Every German quote shows two amounts. The net premium is what you pay today. The gross premium is the ceiling up to which the insurer may raise it. In published sample calculations the net premium sits about 36 percent below the gross premium.
So do not compare quotes on the net premium alone. A tariff with a very large gap can look cheap today and become noticeably dearer later. A small gap means more predictability.
What profit participation does not bring
It does not build up a balance paid out at the end. Term life insurance saves nothing, and if you outlive the term you get nothing back. The share in valuation reserves that section 153 VVG provides at the end of a contract hardly matters here, because very little capital is invested for your policy.
The insurer has to inform you about profit participation every year. If your premium stays the same, publication in the annual report is enough.
Step by step
Read the net premium and gross premium side by side in the quote.
Work out the gap in percent and compare it between quotes.
Check whether surpluses are offset against the premium or form a death bonus.
For a mortgage, plan only with the guaranteed sum.
If the premium goes up, check whether a smaller sum at the old premium still covers you.
Checklist
Net premium and gross premium known
Gross premium affordable in the long run
Form of profit participation known
Guaranteed sum covers mortgage and family
Annual profit participation statement filed
Common mistakes
Comparing only the net premium and ignoring the gross premium
Counting the death bonus towards mortgage cover
Mistaking profit participation for a savings balance
Cancelling after a premium increase instead of adjusting sum or term
Questions and answers
Frequently asked
Is the net premium guaranteed?
No.
The only guarantee is that the premium will not exceed the gross premium.
Some insurers guarantee the net premium only for the current financial year.
Do I get the surpluses paid out at the end?
No.
With premium offset they have already reduced your premium.
With a death bonus they are only paid out on death.
Which form is better?
For most people premium offset, because the sum is fixed.
It suits mortgage cover especially well.
Can the insurer cancel profit participation?
It must let customers share under section 153 VVG, but the amount is not guaranteed.
If it falls, your premium rises, at most to the gross premium.
How often do premiums actually rise?
Specialist sources say increases up to the gross premium are rare.
If your budget is tight, still plan with the gross premium.
What should I do after a premium increase?
Check whether you can lower the sum and keep the old premium.
A new contract means an older entry age and new health questions.
