Does it reduce social welfare for care?

Social welfare for care (Hilfe zur Pflege) counts it as income. It lowers the subsidy but protects your savings for longer.

Up to what age can I sign up?

Many plans accept applicants up to about 65 or 70. The premium and the risk of refusal rise with age.

Insurance broker / Insurance questions / Long-term care

What is long-term care annuity insurance in Germany?

In short

What is it? Long-term care annuity insurance (Pflegerentenversicherung) is a life insurance policy in Germany that pays you a fixed monthly pension for life once you need care. You decide how to spend it. If you insure EUR 1,000 a month at care grade 5 aged 25 to 35, you pay about EUR 50 to 60 a month. It costs more than care daily allowance cover, but premiums are fixed.

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What is long-term care annuity insurance in Germany?

What it costs

Premium examples from published plan calculations in Germany, healthy applicant, monthly payment.

Example	Typical range
Age 25, EUR 1,000 pension at care grade 5	about EUR 50 a month
Age 35, EUR 1,000 pension at care grade 5	about EUR 54 to 60 a month, of which EUR 667 guaranteed depending on the plan
Smaller cover, early start	from about EUR 32 a month
Age 50 to 55, EUR 1,000 pension at care grade 5	often double or more compared with age 35

As of October 2026.

The figure for ages 50 to 55 is a guide value from our quoting practice.

Your premium depends on age, health and pension amount; we obtain the exact quote for you.

Worked example

Age 35, healthy, EUR 1,000 care pension

What you pay in and what reaches the care home if you pay premiums until age 85.

Monthly premium	about EUR 54 to 60
Premiums over 50 years	about EUR 32,400 to 36,000
Pension at care grade 5	EUR 1,000 a month, of which EUR 667 guaranteed
Care home share, national average	EUR 3,364 a month

The pension covers just under a third of the care home share. After about three years of care home stay, more has been paid out than paid in. If you need care earlier, you stop paying premiums and still receive the full pension.

How a long-term care annuity works

You agree a monthly pension, for example EUR 1,000 at care grade 5, the highest of the five German care grades (Pflegegrade). At lower grades the policy pays a fixed percentage of that amount. Some plans only start paying from grade 2 or 3, so check this.

Unlike the statutory long-term care insurance (Pflegeversicherung), which every resident in Germany pays into, the annuity asks for no receipts. The money is yours, whether for a care home, a home care service or relatives looking after you.

Feature	Care annuity (Pflegerente)	Care daily allowance (Pflegetagegeld)
Type of insurance	life insurance	health insurance
Premium	higher, fixed	lower, may rise later
If you cancel	surrender value, part of your money back	nothing back
When you need care	premium waiver, lifelong pension	usually premium waiver, daily rate
Death before needing care	depending on the plan, payment to dependants	no benefit

How big the gap is

In a German care home, residents pay a national average of EUR 3,364 a month out of their own pocket in the first year. Whatever your pension does not cover comes from your savings and then, if needed, from social welfare.

A care pension of EUR 1,000 does not close this gap, but it makes it much smaller. Work out your own gap before choosing an amount.

The drawbacks

The higher premium is the main drawback. For the same money, care daily allowance cover often pays out much more. The surrender value is low in the first years, because costs are deducted first.

Part of the pension often depends on profit sharing and is not guaranteed. Check the quote for the amount that is firmly promised. There are health questions too: existing conditions can lead to a surcharge or refusal.

When you do not need one

If you have substantial assets or a high income in retirement, you can pay for care yourself. Your money is then better invested elsewhere.

If your budget is tight, disability insurance and personal liability insurance come first. If you plan to leave Germany before retirement, check whether the policy still pays abroad. The care annuity suits people who value fixed premiums and money back if they cancel.

Step by step

Work out your care gap: care home share minus expected pension.
Decide from which care grade the benefit should start.
Separate guaranteed and non-guaranteed pension in the quote.
Compare with care daily allowance cover of the same amount.
Answer the health questions fully and honestly.

Checklist

Benefit from care grade 2, better from grade 1
Premium waiver from the first grade that triggers a benefit
Guaranteed pension clearly stated in euros
Option to pause premiums if money is short
No waiting period or only a short one

Common mistakes

Treating the pension including profit sharing as guaranteed
Cancelling in the first years and losing a lot of money
Buying a care annuity before your disability risk is covered
Looking only at care grade 5, although grades 2 and 3 are far more common

Questions and answers

Frequently asked

What is the difference between a care annuity and care daily allowance?

The care annuity is life insurance with fixed premiums and a surrender value. Care daily allowance is health insurance, cheaper, but premiums can rise and you get nothing back if you cancel.

Is the care pension taxed?

No, the care pension is free of income tax in Germany.

What happens if I die without needing care?

Depending on the plan, dependants receive a death benefit, often part of the premiums paid. Some plans pay nothing.

Can I pause the premiums?

Many policies allow you to make them premium free. Your later pension is then lower.

Sources

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Long-term care insurance in Germany

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