# Term life insurance in Germany: protecting your family and your mortgage > A Risikolebensversicherung pays a fixed sum if the insured person dies during the term. It has no savings element and is inexpensive. For expats, it often matters more than for Germans, because survivors' pensions depend on years of German contributions and on being married. Quelle/Source: https://www.nammert.com/en/insurance-broker-term-life.php Updated: 2026-09-18 ## How much term life cover do I need in Germany? A common starting point is three to five times your gross annual income, plus any outstanding loans. More precisely: add up what your family needs each year until the children are independent, subtract survivors' pensions and your partner's income, then add the remaining mortgage and one-off costs such as moving home. Extra cover costs little in term life, so err on the generous side. ## At a glance - **Mandatory?:** No, but banks often require it for a mortgage - **Benefit:** lump sum on death during the term - **Rule of thumb:** three to five times gross annual income plus loans - **Tax:** inheritance tax avoidable with the right contract structure - **Cancellation:** at the end of any insurance period, no savings lost ## Survivors' pensions in Germany: less than many newcomers expect The German statutory pension pays a widow's or widower's pension and orphans' pensions, but only after the deceased has at least five years of insurance, unless death resulted from a work accident. The larger widow's pension is 55 percent of the pension the deceased would have received, which is small after only a few working years in Germany. The survivor's own income above an allowance reduces it by 40 percent. Unmarried partners receive nothing, however long they lived together. Only spouses and registered civil partners qualify. If you live with your partner and children without being married, term life insurance is the most important protection you can buy. ## German inheritance tax: who owns the policy matters Unlike in some countries, a life insurance payout in Germany can be subject to inheritance tax if the deceased was the policyholder. Spouses have a tax-free allowance of €500,000 and children €400,000. Unmarried partners have only €20,000, so a typical payout would be taxed at high rates. The solution is a cross-ownership structure: each partner takes out a policy on the other's life and pays the premiums from their own account. When the insured partner dies, the policyholder receives their own money, which is not an inheritance. This has to be set up from the start. ## Mortgages, health questions and moving abroad German banks often require life cover for a mortgage and offer their own. You do not have to take it: a policy from any insurer, assigned to the bank for the remaining debt, is usually accepted and often cheaper. Decreasing-sum policies follow the loan balance and cost less. The application asks about your health, smoking and dangerous hobbies, including treatment abroad. Incorrect answers allow the insurer to withdraw for five years, or ten if deliberate. Most policies continue to cover you worldwide if you later leave Germany, but check how premiums are collected once you no longer have a German address. ## What is covered - Death from illness, accident or any other cause during the term - Payout to beneficiaries of your choice - Early payout for terminal illness, depending on the policy - Increases without new health questions after certain life events, depending on the policy - Worldwide cover, also after moving abroad - Assignment to a bank as mortgage security ## What is not covered - Death after the end of the term - Suicide within the first three years, unless caused by a pathological mental state - Non-payment where health conditions were not disclosed - Death while actively taking part in war - Undisclosed dangerous hobbies, depending on the policy ## Who needs it - Parents whose children depend on their income - Couples with a mortgage, especially with one main earner - Unmarried couples, who receive no survivors' pension - Newcomers who have not yet built up German pension rights - Business partners who need to buy out each other's share ## Who can do without - Single people without dependants or debts - People whose assets would support their family without earned income ## What it costs Term life is one of the cheapest insurances in Germany because it only pays if death occurs during the term. Age, term length, sum insured and smoking status drive the price. **What drives the premium:** - Age at the start and length of the term - Sum insured, level or decreasing - Smoker or non-smoker, usually twelve months without smoking - Health, height and weight - Occupation and dangerous hobbies - Gross versus net premium after profit participation _We do not quote a premium range, because age, term and smoking status change the price many times over. Your premium is only fixed in the quote._ ## The policy levels on the market - **Level sum:** The sum stays the same throughout the term. The standard way to protect a family. - **Decreasing sum:** The sum falls each year, in line with a loan being repaid. Cheaper, suitable for a mortgage. - **Joint life:** One contract for two people, paying on the first death. Slightly cheaper, but the survivor is then left without cover. ## How to recognise a good policy | Criterion | Minimum standard | Strong policy | Why it matters | | --- | --- | --- | --- | | Increase options | marriage and birth | also buying a home, pay rises, self-employment | Your needs grow with your life, your health usually does not improve. | | Extension option | none | extend the term without health questions | Children take longer than planned, mortgages run longer than expected. | | Terminal illness benefit | none | payout with a life expectancy under twelve months | The money helps your family during the hardest time. | | Smoker definition | twelve months without smoking | clear rules on e-cigarettes and occasional smoking | Wrong answers on smoking are a frequent dispute after a death. | | Premium stability | large gap between gross and net premium | small gap | The insurer may raise your premium up to the gross amount if profits fall. | | Residence rules | cover continues abroad | no restrictions on premium payment or claims from abroad | Many expats leave Germany during a 20 to 30 year term. | ## Insurers on the German market Term life is underwritten by German life insurers. Prices vary widely, terms less so than in other lines. Some insurers mainly sell directly. This is a market overview, not a statement about which insurers we work with. - **Hannoversche**: direct insurer of the VHV group - **CosmosDirekt**: direct insurer of Generali Deutschland, sells mainly without intermediaries - **EUROPA**: direct insurer from Cologne, part of the SIGNAL IDUNA group - **Dialog**: Generali Deutschland's specialist for biometric risks, sells through brokers - **InterRisk**: part of the Vienna Insurance Group, sells through brokers - **Allianz**: life insurer of the Allianz group, agents and brokers - **HanseMerkur**: part of the Hamburg-based HanseMerkur group, agents and brokers - **LV 1871**: mutual from Munich, sells through brokers - **HUK-COBURG**: sells through its own network only, does not work with brokers 77 insurers supervised by BaFin, the German regulator, are licensed for this class of insurance. (Lebensversicherer). Source: BaFin company database, retrieved 2026-09-18. Insurers from other EU countries selling through a branch or without a German office are not included. ## Typical claims and who pays - **Unmarried partner, big tax bill** (only a €20,000 allowance, the rest taxed as inheritance): Every policy pays; the tax depends on who owns it. With cross-ownership, the surviving partner receives their own money and no inheritance tax is due. - **Terminal diagnosis, months to live** (the full sum while still alive instead of afterwards): Basic policies only pay on death. Strong ones pay early if a doctor confirms a life expectancy of less than twelve months. - **Mortgage outlasts the policy** (remaining loan uninsured, often five or six figures): Buying a new policy later means being older and possibly less healthy. Strong policies let you extend the term without health questions. - **Asthma left off the application** (insurer withdraws, the family gets nothing): If a known condition was not disclosed, the insurer can withdraw after the death. No policy protects against that, only a complete application. - **Fatal accident on a trip abroad** (the full sum insured): German term life covers death worldwide in almost all policies. Expect the insurer to ask for a translated death certificate and official reports. - **Buying a flat, cover too small** (extra loan secured without new health questions): Basic policies only allow increases for marriage or a birth. Strong ones also accept buying a home as a reason. ## Myth or truth - „In Germany, employers usually provide life cover as a standard benefit." ✘ False. Unlike in the US or UK, group life cover is not a standard employee benefit here. Some companies offer it, often within a company pension, but most employees have no employer-paid death benefit. - „Term life in Germany can cost less a month than a streaming subscription." ✔ True for young, healthy non-smokers with a moderate sum. Age, health, smoking and term drive the price, so a smoker in their forties pays many times more. - „German term life pays out whatever the cause of death." ✔ True, with narrow exceptions. Illness and accidents are covered alike; the exclusions include active participation in war and cases where health questions were answered falsely. - „You can insure your partner's life without them knowing." ✘ False. German law requires the written consent of the insured person for any sum above normal funeral costs. That consent is also what makes cross-ownership possible. - „If you move back home, your German policy ends automatically." ✘ False for most policies, which cover you worldwide. The practical questions are how premiums are paid without a German address and how claim documents reach the insurer. ## Common mistakes - Assuming a policy from your home country will cover you fully in Germany - Unmarried couples making the insured person the policyholder and triggering inheritance tax - Taking the bank's policy without comparing - Letting the term end before the youngest child is independent - Not disclosing smoking or treatment abroad - Forgetting to update beneficiaries after a separation ## FAQ ### Can I buy term life insurance in Germany as a foreigner? Yes. What matters is that you live in Germany when you apply. Some insurers ask about your residence permit or how long you plan to stay. Nationality as such is rarely a barrier. ### Does my term life policy from my home country still cover me in Germany? Possibly, but check the terms. Some foreign policies require residence in the issuing country, and a German bank may not accept a foreign policy as mortgage security. Keep the old policy until the new one is in force. ### Is the payout taxed in Germany? There is no income tax on the payout. Inheritance tax can apply if the deceased was the policyholder and the sum exceeds the beneficiary's allowance. For unmarried partners this happens quickly, which is why cross-ownership is recommended. ### Does term life pay out after suicide? After three years of cover, yes. In the first three years the insurer does not pay, unless the act was committed in a state of pathological mental disturbance. This is set by the German Insurance Contract Act. ### Do I have to take the bank's life insurance for my mortgage? No. The bank may require life cover but cannot dictate the insurer. A policy of your own, assigned to the bank, is usually accepted. ### Who receives the money? The beneficiary you name in the contract. If you name nobody, the sum becomes part of your estate, which may be governed by German or foreign inheritance law depending on your habitual residence. ### Is joint life a good idea for couples? Rarely. It is only slightly cheaper than two separate policies, and after the first death the survivor has no cover. Two cross-owned policies are usually better. ### How long should the term be? Until the youngest child is financially independent or the mortgage is repaid, whichever is later. Twenty to thirty years is common. ## 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 and without obligation: the insurer pays our commission. You can write in English. https://www.nammert.com/en/insurance-broker-term-life.php#anfrage --- NAMMERT Assekuradeur GmbH, insurance broker licensed under section 34d(1) of the German Trade Regulation Act, broker register no. D-C08Q-TOSD4-37. For boat and yacht insurance we act as underwriting agency, not as broker. NAMMERT Assekuradeur GmbH, Karl-Marx-Straße 4, 15711 Königs Wusterhausen, +49 3375 29 12 77, info@nammert.com. Wikidata: Q141141479.