# Savings life insurance in Germany: an endowment policy explained for newcomers > The German Kapitallebensversicherung is what other markets call an endowment policy: you save over a fixed term, and if the insured person dies before the end, the insurer pays an agreed sum to your family. It comes as a traditional policy with a small guaranteed rate or as a unit-linked policy invested in funds. For expats the key questions are how long you will stay in Germany and whether you need the death cover at all, because pure protection is much cheaper on its own. Quelle/Source: https://www.nammert.com/en/insurance-broker-savings-life-insurance.php Updated: 2026-11-04 ## Do I need savings life insurance, or is term life enough? It depends on the job you want the policy to do. If you only need your partner, children or bank protected if you die, term life insurance does that for a fraction of the premium. A savings policy makes sense if you deliberately want saving and death cover in one contract, can commit to at least twelve years and are confident you will keep paying. Many people split the two: term life for protection, a separate savings plan for growth. If you may leave Germany, factor that in before you sign. ## At a glance - **Mandatory?:** No, voluntary - **Tax at maturity:** only half the gain is taxable after 12 years and payout from age 62 - **Minimum death cover:** at least half of all premiums for that tax break (policies from 1 April 2009) - **Maximum guaranteed rate:** 1.0% for new policies since 1 January 2025 - **If the insurer fails:** statutory rescue fund Protektor takes over, guaranteed benefits cut by at most 5% - **Cooling-off period:** 30 days after receiving all documents ## Traditional or unit-linked In a traditional policy the savings part goes into the insurer's general fund, invested mainly in bonds, loans and property. You get a guaranteed technical interest rate on the savings part, capped at 1.0 percent for new German policies since 2025, plus bonuses the insurer sets each year. Bonuses are not guaranteed. In a unit-linked policy the savings part is invested in funds you pick from the insurer's list. The value rises and falls with markets, and you carry the investment risk. Some policies guarantee part of the premiums, which costs upside. In both forms the death benefit is agreed as a minimum amount and does not depend on fund prices. We do not promise returns, because nobody can do that honestly. Projections in a quote are illustrations based on assumed figures. Only what is explicitly labelled as guaranteed is binding. We advise on insurance contracts, not on individual funds or securities. ## How it differs from term life and a private pension Term life pays only if death occurs during the term and builds no savings. A private pension pays an income for life, and death cover is a side feature. A savings life policy pays a lump sum at maturity, or the death benefit earlier, so it covers a fixed period and then ends. The death cover is not free. Every premium pays for risk cover and charges first, and only the rest is saved. The higher the death benefit relative to premiums, and the older the insured person at the start, the less goes into savings. ## German tax rules, and what changes if you move Only the gain is taxable, meaning the payout minus premiums paid. As a rule it falls under the flat 25 percent capital gains tax plus solidarity surcharge. If the policy has run for at least twelve years and pays out after your 62nd birthday, only half the gain is taxed at your personal income tax rate. For policies taken out until the end of 2011 the age threshold is 60. That half rate requires a minimum death benefit for policies from 1 April 2009: with regular premiums, at least half of all premiums due over the term. For unit-linked policies a further 15 percent of the gain from fund income is tax-free. Policies whose first premium was paid before 2005 are usually entirely tax-free after twelve years with at least five years of premiums. The contract keeps running if you leave Germany, but where you live when it pays out can change which country taxes it and how. Before moving or retiring abroad, ask a tax adviser in both countries. We can tell you what your contract says, not how your new home will tax it. ## Surrendering is the costly way out German law spreads acquisition costs over the first five years of the policy. That is why the surrender value in the early years is often well below what you paid in. Surrender also ends the death cover, and a tax-free old policy loses that status for good. Before surrendering, check the alternatives: making the policy paid-up so the value stays invested with reduced cover, a premium holiday, or a policy loan from the insurer against the surrender value. Specialist buyers of second-hand policies sometimes pay more than the surrender value. ## What is covered - Lump-sum payout of the savings at the agreed maturity date - Death benefit to your named beneficiaries if the insured person dies before maturity - Guaranteed maturity value in traditional policies, plus non-guaranteed bonuses - Fund choice and free switches in unit-linked policies, depending on the contract - Paid-up option, premium deferral or policy loan instead of surrender - Indexation: yearly increase of premium and benefit without new health questions - Premium waiver on occupational disability, if added - Assignment to a bank as security for a loan ## What is not covered - No lifelong income, the policy ends with the payout - No guaranteed return on the fund part - No inflation protection unless indexation is agreed - Bonuses are not guaranteed and can fall - No benefit for disability or long-term care without a separate add-on - No compensation for losses on early surrender ## Who needs it - Long-term residents who want to save for twelve years or more and protect their family at the same time - Homeowners who want to repay a loan in one go at the end and need death cover for it - Parents and grandparents who want to secure a sum for a child at a fixed date - Anyone holding an older German policy who wants to know whether to keep it ## Who does not need it - If you only need protection for your family: term life is far cheaper - If you want an income for life: that is what a private pension does - If you may leave Germany within a few years or have no emergency savings ## What it costs You choose the premium yourself, so there is no price list as with property insurance. What matters is how much of each premium is actually saved after charges and risk cover. The product information sheet shows the effective costs, meaning how much charges reduce the return each year. **What drives the premium:** - Acquisition and distribution costs, spread over the first five years - Ongoing administration and fund charges - Death benefit relative to premiums - Age and health of the insured person at the start - Term until maturity - Guarantees and add-ons such as a premium waiver on disability _We do not quote sample premiums, because premium, term and death benefit are freely chosen. Costs and guarantees are binding in the offer. Tax rules as of 2026._ ## The policy levels on the market - **Traditional savings policy:** Guaranteed rate on the savings part, at most 1.0 percent for new policies, plus bonuses. Predictable and calm, with modest upside. - **Unit-linked with guarantee:** Part of the money secures a minimum value at maturity, the rest goes into funds. Less volatility, less upside. - **Unit-linked without guarantee:** All savings go into funds and the result follows the market. Only sensible with a long term and a tolerance for swings. ## How to recognise a good policy | Criterion | Minimum standard | Strong policy | Why it matters | | --- | --- | --- | --- | | Effective costs | shown in the product information sheet | low over the whole term, even for small premiums | Charges are certain, returns are not. | | Death benefit | at least half of total premiums | freely chosen and adjustable during the term | Below that you lose the half tax rate, above it you pay more for risk cover. | | Guaranteed maturity value | stated in the offer | shown clearly apart from all projections | Only the guarantee is a promise, the rest is an illustration. | | Flexibility | paid-up option | top-ups, partial withdrawals and premium holidays at no cost | Over twenty years your income, plans and country may change. | | Policy loan | on request | contractually promised | A loan bridges a gap without a loss-making surrender. | | Fund range | a few in-house funds | a broad range including low-cost index funds and free switches | Expensive funds cut into savings on top of the policy charges. | | Documents in English | German only | summaries and service in English | You should be able to read what you are signing. | ## Insurers on the German market Savings life policies are sold by German life insurers, most of which now focus on unit-linked versions. Differences lie in costs, guarantees and flexibility rather than in the brand. This list is a market overview and says nothing about which insurers we work with. - **Allianz**: life insurer of the Allianz group - **R+V**: insurer of the cooperative banking group, also sold in Volksbanken - **Generali**: part of Generali Deutschland - **CosmosDirekt**: direct insurer of Generali Deutschland, sold online - **Nürnberger**: agents and brokers - **Alte Leipziger**: mutual insurer - **ERGO**: pension and life insurer of the ERGO Group - **Württembergische**: part of the W&W group 77 insurers supervised by BaFin, the German regulator, are licensed for this class of insurance. (Lebensversicherer). Source: BaFin company database, 2026-09-18; EU insurers without a German office excluded. ## Typical claims and who pays - **Death in year five** (otherwise only the small savings balance): Every savings life policy then pays the agreed death benefit, even if little has been saved yet. That is what the risk part of the premium is for. - **Surrender after three years** (surrender value often well below premiums): Every policy carries its acquisition costs. Strong policies charge no surrender penalty and offer a paid-up option or loan early on. - **Moving abroad mid-term** (premiums from abroad, new tax questions): Basic contracts keep running but may make paying and servicing from abroad awkward. Strong ones accept foreign accounts and offer English-language service. - **Market crash before maturity** (fund value can drop sharply): No unit-linked policy guarantees prices. A maturity lifestyle option moves money into calmer assets in the final years and softens the fall. - **Unable to work at 45** (premiums continue, income stops): Without an add-on you keep paying or make the policy paid-up. With a premium waiver included, the insurer pays the premiums for you. - **Inflation over 25 years** (the fixed payout buys much less): Indexation raises premium and benefit each year but does not offset inflation. The loss of purchasing power always stays with the saver. ## Myth or truth - „The maturity value in the quote is guaranteed." ✘ False. Only the amount explicitly labelled as guaranteed is promised, and it is usually much smaller. The big number is an illustration with an assumed return. - „For the same death benefit, a savings policy costs many times more than term life." ✔ True. You also pay for the savings part and its charges. If you only need protection, term life costs a fraction. - „German policies with a first premium before 2005 are usually tax-free at maturity." ✔ True, if the policy runs for at least twelve years with at least five years of premiums. Surrendering early loses that status. - „If I cancel, I get at least my premiums back." ✘ False. Acquisition costs are charged in the first five years and risk cover is deducted, so the surrender value is often below total premiums at first. - „A German policy has to be cancelled when you leave the country." ✘ False. The contract continues abroad. What changes may be the tax treatment at payout and how you pay premiums, so check both before you move. ## Common mistakes - Buying a savings policy when all you need is death cover - Treating the projected maturity value as a promise - Surrendering a tax-free pre-2005 policy without working out the cost - Surrendering in the early years instead of making the policy paid-up - Signing a twenty-year contract while unsure whether you will stay in Germany - Not updating beneficiaries after marriage, separation or a new child ## FAQ ### What is the difference between savings life and term life? Term life only pays if death occurs during the term, and it is cheap for that reason. A savings policy always pays: either the death benefit or the savings at maturity. In return the premium is many times higher. ### How is the payout taxed in Germany? Only the gain is taxable, not your premiums. As a rule the flat capital gains tax applies. After twelve years and a payout from age 62, only half the gain is taxed at your personal rate, provided the policy meets the minimum death cover. ### What happens to my policy if I leave Germany? It keeps running and you can usually keep paying from abroad. Tax at payout may then depend on your new country of residence. Speak to a tax adviser before you move, and tell the insurer your new address. ### What do I get back if I cancel? The surrender value. Because acquisition costs are spread over the first five years, it is often below the premiums paid in the early years. The figures are in the table of guaranteed values in your documents or in the insurer's annual statement. ### Is my money safe if the insurer goes bust? German life insurers belong to a statutory rescue fund run by Protektor Lebensversicherungs-AG. It takes over and continues the policies, and guaranteed benefits may be reduced by at most 5 percent. ### Who receives the money if I die? The person named as beneficiary in the policy. A revocable nomination can be changed at any time, an irrevocable one only with the beneficiary's consent. Without a nomination the benefit goes to your estate. ### How long can I cancel a new policy? Within 30 days of receiving all contract documents, without giving a reason. After that, you can still surrender the policy, make it paid-up or take a policy loan. ## Legal basis and sources - [Insurance Contract Act (VVG, German)](https://www.gesetze-im-internet.de/vvg_2008/) - [BaFin company database (licensed insurers)](https://portal.mvp.bafin.de/database/InstInfo/) ## Request quotes We obtain quotes and come back with a comparison, free of charge. You can write in English. https://www.nammert.com/en/insurance-broker-savings-life-insurance.php#anfrage --- Your broker: Norman Nammert, trading as NAMMERT. Insurance broker licensed under section 34d(1) of the German Trade Regulation Act. Broker register no. D-C08Q-TOSD4-37. NAMMERT Assekuradeur GmbH is a separate company. It does not arrange your contract. NAMMERT Assekuradeur GmbH, Karl-Marx-Straße 4, 15711 Königs Wusterhausen, +49 3375 29 12 77, info@nammert.com. Wikidata: Q141141479.